Among the four categories of international economic cooperation: international trade, overseas investment, overseas engineering contracting, and international labor cooperation, international trade occupies the first place and is also the foundation. International trade is further divided into exports and imports. The outward oriented economy, also known as an export-oriented economy, is mainly aimed at promoting the development of export industries. Today, let's take a look at the legal risks and prevention of international trade (mainly from the perspective of export trade).
01. Contract risk
In reality, there are still a large number of "non contract transactions" in export trade, or "orders" are mistakenly used as "contracts". A complete international contract for the sale of goods should have the following elements: a. identification information and contact information of all parties; b. The name, model, specifications, and quantity of the goods; c. Price, international trade terms; d. Quality and acceptance clauses; e. Packaging; f. Transportation and insurance; g. Payment method; h. Liability for breach of contract; i. Force majeure; j. Dispute resolution methods and applicable laws. If the contract is not signed or the elements of the contract terms are missing, when disputes arise, one often falls into a situation of being at a loss.
02. Collection security risks
From the perspective of exporters, the international settlement methods, in descending order of foreign exchange risk, are as follows: pre shipment telegraphic transfer (pre T/T); Letter of Credit (L/C); Documents against Acceptance (D/A); Post shipment telegraphic transfer (post T/T). When negotiating with foreign importers, we should try our best to use the most favorable settlement method for our side. When using a letter of credit for payment, one must beware of the "soft terms" of the letter of credit. In addition to choosing the settlement method, it is also necessary to strengthen the background and credit investigation of foreign customers. According to specific business situations, flexibly apply foreign exchange guarantee measures, such as China Export Credit Insurance Corporation (Sinosure) export credit insurance, bank guarantees, etc.
Countries often impose export controls for reasons such as homeland security, foreign policy, environmental protection, and public order. In summary, the current main export controls include the following two categories: one is general export control policies based on sensitive items; Another type is embargoes and sanctions targeting specific countries and entities/individuals that affect trade transactions. In the current complex international situation, foreign trade enterprises need to constantly pay comprehensive attention to domestic and foreign export control laws and regulations, attach importance to and strengthen export compliance: a. China's Export Control Law (officially implemented on December 1, 2020), the Catalogue of Prohibited or Restricted Import and Export Goods and Technologies issued by the Ministry of Commerce, the General Administration of Customs, the Forestry Bureau, and the State Environmental Protection Administration; b. Overseas export control laws (especially the laws of the destination country and other applicable laws); c. If the trading partner involves entities or individuals within the scope of sanctions imposed by the United Nations, the European Union, and the United States, they must also comply with the requirements of relevant sanctions regulations.
04. Intellectual Property Legal Risks
The scope and intensity of intellectual property protection on a global scale are increasingly strengthening. The first thing foreign trade enterprises need to do is to establish and strengthen the awareness and concept of intellectual property protection. Before exporting the product, if necessary, professional institutions can be commissioned to conduct intellectual property due diligence. If it is determined that there is a high risk of infringement in a certain technical solution, and there is still time to do avoidance design before the product goes out to sea, such as for electronic products that can be quickly solved, avoidance design can be done. If it is not possible or the cost is too high, measures such as invalidating infringing patents, obtaining licenses, or acquiring patents can be considered to cope. If the investigation determines that there is no risk and there is still a possibility of infringement claims in the future, the due diligence work records in the early stage can also be used as a consideration for reducing compensation liability (subjectively, there is no malicious infringement).
05. Commercial Fraud Risk
In practice, there are often cases of foreign trade enterprises being hacked into their email addresses, and foreign customers being scammed into making payments to the hacker's designated account. To prevent