International trade can be highly risky or richly rewarding. And the part of the financial spectrum you fall into depends on how much knowledge you have in the industry, how much experience you’ve garnered, and what type of decisions you make.
Sometimes, exporters make certain mistakes that cause them to lose a part or their entire investments, and even worse, sometimes they do everything right and the buyer still refuses to pay for some reason or the other.
If you’re a new or existing exporter and are wondering what to do in the event that a buyer is refusing to fulfil their part of the agreement, here are 4 things to do if an international buyer refuses to pay for the commodities you have exported to them:
See Also: 9 Important Things To Know Before You Ship Agricultural Products
1). You Can Still Recall The Consignment Provided You Haven’t Sent Them The Original Bill of Lading (OBL) Or Telex Release:
First, never agree to collect a part of your full payment after you’ve sent the bill of lading and other shipping documents if there’s no payment guarantee in place because if you do and the buyer changes their mind from buying, there’s nothing else you can do. Always ensure there’s a payment guarantee in place or that you’ve previously received a part-payment before shipping.
Now to the point.
If you’ve not just agreed to ship a certain commodity to a buyer but have shipped it and they have refused to pay despite you sending the documents bank to bank via a bill of collection or have sent the scanned document to the buyer with no payment made, you can still give an instruction to the shipping line to change the transit course of the goods or to assign it to someone else at the destination port.
When buyers default in making payment, the only thing that stops them from claiming the goods at the port is if they don’t have the original bill of lading. The only problem here is while they may not be able to fraudulently get the goods without the original BL, it would cost you a lot of money to reroute the goods to either your destination or to a different destination. In this scenario, it is then best that you find a buyer in the same destination who may be willing to buy the goods for a considerably lower price deal so that you don’t incur too much expenses.
2). If You Have Already Sent The OBL, You Can Report To The Local Embassy In Your Country:
If for some reasons, you sent the original bill of lading and other shipping documents to the buyer without collecting your payment for the goods exported, you can start by reporting the incident to the local embassy of the international buyer in your country, after which they’d reach out to the buyer to try to understand what went wrong and to mandate they pay you what you’re owed.
If the buyer is still evasive, you can officially file a lawsuit through the embassy and they’d be tagged wanted in their country.
See Also: 4 Ways To Quickly Transport Container Cargoes To The Port In Nigeria
3). Report To The International Chamber Of Commerce (ICC):
Using the International Chamber of Commerce in a scenario where you don’t get paid is similar to reaching out to the local embassy of the country the buyer is from.
You’d need to first note the incoterms that you agreed with the buyer, present the signed contract, and the ICC will either try to settle the situation amicably between both parties or will help file a lawsuit against the wanting party to ensure you get paid.
Since the ICC is in almost every country around the world, you can report to your local chapter and they’d initiate the local chapter at the buyer’s destination to follow up on the situation.
4). Retrieve Your Payment If You Took Out An Export Credit Insurance Policy:
Now if you’ve fulfilled all agreed terms of the trade and the buyer still refused to pay, you can simply withdraw about 80-95% of your payment from your insurance body if you have an export credit insurance policy in place.
Usually, the export-import banks of almost all countries offer an export credit insurance package for exporters shipping commodities, but some other private insurance companies do too.
When an export credit insurance policy is in place, you can get your money from the insuring body while they follow up with the buyer to ensure they retrieve the payment.
Another way to insure an export is to sell through a web platform like Alibaba and to have the trade assurance package enabled, so that it would protect both you the exporter and the importer.
If you’re doing any type of transaction without a Letter of Credit in place, always take out an Export Credit Insurance policy to secure your payments. In Nigeria, the Nigerian Export-Import (NEXIM) Bank is a great place to get it done.
See Also: 12 Things You Must Never Say To Any Local Or International Client
An Important Point
Startup Tips Daily Media’s sister company, Globexia Limited, is a global commodity trading firm that exports agricultural products like Sesame Seeds, Raw Cashew Nuts, Dry Split Ginger, Soybeans, Dry Hibiscus Flower, Tiger Nuts, and much more agro commodities from Nigeria to international buyers around the world. The company also exports solid minerals like muscovite mica and Lithium ores, and facilitates oil and gas trade within Nigeria.
If you’re an international buyer looking to purchase commodities from Nigeria through an export company you can trust, Globexia is an organisation to work with.
You can contact us through the details below.
+2348080888162
www.globexia.com
We look forward to hearing from you.
Thank you.
