Strategies and methods to prevent risks in cross-border transactions

In the process of cross-border transactions, faced with the complex international trade environment, companies need to take a series of measures to prevent potential risks. This article will focus on remittance risks, collection risks, letter of credit risks, and prevention strategies for foreign trade email fraud.

Prevention of remittance risks

• Strengthening credit investigation: Choosing an importer with strong financial strength and good credit is a prerequisite for ensuring safe collection of foreign exchange.
• Sign favorable settlement terms: Increase the prepayment ratio as much as possible to reduce your own financial pressure.

Prevention of collection risks

• Understand trade regulations: Be familiar with the relevant trade regulations of the exporting country, especially for importers in countries with strict trade controls.
• Choose reliable partners: Even when dealing with long-term customers, their credit status must be re-evaluated.
• Use D.P. at sight: Avoid the use of controversial long-term payment methods.

Prevention of letter of credit risks

• In-depth investigation of customer background: including but not limited to business conditions, solvency, market performance, etc.
• Verify bank credit: Choose a reputable bank to issue a letter of credit and ask another bank to confirm it.
• Contract in detail: Ensure that the terms of the letter of credit meet the needs of the buyer and the seller, especially the option of an irrevocable confirmed letter of credit.
• Scrutinously review letters of credit: Make sure all terms are as expected and correct any discrepancies promptly.
• Close cooperation between banks and enterprises: The advising bank should verify the authenticity of the letter of credit, while export enterprises need to carefully select trading partners.
• Reject unreasonable terms: Avoid signing contracts that may harm your interests.

Foreign trade email fraud prevention

• Confirm account changes: When you receive an email to change your payment information, be sure to verify it through another method.
• Improve communication security: In addition to email, phone calls and other means should be used to strengthen contact with customers.
• Enhanced email protection: Choose a more secure email service and change your password regularly.
• Identify fake emails: Identify fraudulent messages by checking email IP addresses, browsing history, etc.

To sum up, whether it is traditional payment methods or emerging cyber threats, companies should remain highly vigilant when participating in cross-border transactions and take effective measures to protect their own interests. By implementing the above recommendations, the risk of encountering fraud can be significantly reduced, thereby laying a solid foundation for successful international business.