International Trade Consideration MAAD AL FARES Foreign Trade

International Trade Consideration { MAAD AL FARES Foreign Trade Manager CHAM BANK E-MAIL m. alfares@chambank. com 2 Maad Al. Fares 11/30/2020

Introduction International Trade Considerations Political, Legal and Economic Issues Documentary Requirements Main objectives of the parties 3 Maad Al. Fares 11/30/2020

International Trade Considerations A Seller A Buyer An agreed product or services A sales contract Shipping and delivery details Terms of payment Required documentation Insurance cover 4 Maad Al. Fares 11/30/2020

Political, Legal and Economic Considerations Political/governmental policies and their potential impact on the transaction would include: Restrictive government policies Exchange controls, Tariffs and quota restrictions, Expropriation Export/import licensing, Trade embargoes Anti-dumping and/or Hazardous goods legislation Pre-shipment inspection/price comparisons, Resale price restrictions Health requirements, Taxation etc. 5 Maad Al. Fares 11/30/2020

Political, Legal and Economic Considerations Currency policies of the importing and exporting countries and the associated risks which include: Foreign exchange policies and procedures Licensing Scarcity of convertible currency Fluctuation and volatility of exchange rates Covering and hedging of foreign exchange exposure 6 Maad Al. Fares 11/30/2020

Political, Legal and Economic Considerations Fraud possibilities in the transactions or in documents Payment against documents for imports en route cannot give protection against the risk of fraud when dealing with a seller who is not known, or concerning whom reports are not wholly satisfactory. “Know who” can be more important than “Know how”. Goods should not be shipped, or a service provided merely against a “paper promise to pay” which has not been thoroughly examined, authenticated or verified. 7 Maad Al. Fares 11/30/2020

Jurisdictional and other legal issues to be considered Dispute Settlement Locale of contract’s enforcement Availability of legal representation Legal policies towards foreign corporations Legal Requirements Quality of goods or services to be performed Specification of goods or services Labeling Packaging/marking of the goods Retention of title to the goods 8 Intellectual property rights Registration of trade marks, patents etc, globally Maad Al. Fares 11/30/2020

International Commercial Terms of Trade terms or shipping terms in international trade Incoterms 2010 – Trade terms are one of the key elements of international contracts of sale. They identify for the parties what to do with respect to their individual responsibilities. They are normally applicable: By reference in the contract of sale As an international custom of the trade By implication 9 Maad Al. Fares 11/30/2020

Documentary Requirements Buyer Seller What documents are required under the regulations of the exporting country? Country of Import 10 What document(s) will the seller be able to supply? Country of Export What document(s) does the buyer need? What documents are required under the regulations of the importing country? Maad Al. Fares 11/30/2020

Main Objectives of the Parties to a Transaction The Buyer’s objectives are” Contract Fulfillment Credit To receive the correct quantity and quality of the goods or services required To receive in a timely manner and at the correct place, the goods purchased or the service required Assurance that he does not have to pay the seller until he is certain that the seller has fulfilled his obligations correctly. A managed cash flow, with the possibility of obtaining bank finance To defer payment as long as possible Convenience The use of an intermediary in whom both parties have confidence. Maad Al. Fares 11/30/2020 11

Main Objectives of the Parties to a Transaction The Seller Contract fulfillment Prompt payment on completion of his contractual obligation, so as to improve the liquidity of his business Receive the correct amount in the correct currency Convenience 12 Assurance that he will be paid in full within the agreed time limit To deliver the contracted goods or services as quickly as possible The convenience of receiving payment at his own bank, or through a bank in his own country Maad Al. Fares 11/30/2020