International trade/Risks

The risks that exist in International trade can be divided into two major groups:

1. Commercial risks

• Risk of insolvency of the buyer
• Risk of protracted default - the failure of the buyer to pay the amount due within six months after the due date
• Risk of non-acceptance

2. Political risks

• Risk of cancellation or non-renewal of export or import licences
• War risks
• Risk of expropriation or confiscation of the importer's company
• Risk of the imposition of an import ban after the shipment of the goods
• Trabsfer risk - imposition of exchange controls by the importer's country or foreign currency shortages