AIM Quarterly Seminar July 24, 2008 Market Access Issues: Due Diligence Resources Virginia Economic...
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AIM Quarterly Seminar July 24, 2008 Market Access Issues: Due Diligence Resources Virginia Economic Development Partnership Division of International Trade
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Transcript of AIM Quarterly Seminar July 24, 2008 Market Access Issues: Due Diligence Resources Virginia Economic...
AIM Quarterly Seminar
July 24, 2008
Market Access Issues:
Due Diligence Resources
Virginia Economic Development Partnership Division of
International Trade
Due Diligence = Doing Your Homework
Control/Mitigate Risks Related to:
• Country (Market)
• Export Compliance
• Customer- Know Your Buyer
• Bank/Finance
What is Due Diligence?
Due Diligence is a Continuous Process
What is the target market’s overall risk?
• Corruption (Foreign Corrupt Practices Act)http://www.usdoj.gov/criminal/fraud/fcpa/
• Capital Controls (getting paid)
• Private Property Protection
• Intellectual Property Protection
• Does the US have a Trade Embargo/Sanctions against the country?
• Macroeconomic Conditions (defaults)
Verifying Country Risk
Resources (free)
www.export.gov Country Commercial Guides
www.countryrisk.com Portal of free online resources
www.trading-safely.com Industry-specific risks for over 150 countries
www.globalcorruptionreport.org Transparency International annual publication
www.worldbank.org
Verifying Country Risk
Who Regulates US Exports?• US Dept of Commerce Bureau of Industry & Security (BIS) Export Administration Regulations (EAR)• U.S. State Department• U.S. Dept of Agriculture• U.S. Drug Enforcement Administration
Who Will Receive Your Product?Make sure individual buyer, company, and/or country not prohibited
What Will Your Product be Used for?Dual-use goods
Export Compliance- Know Your Buyer
Red Flags•Customer or its address is similar to someone on a list•Product usage does not fit buyer’s business•Customer willing to pay cash for expensive items•Customer unfamiliar with product details•Routine installation or training denied by customer•Customer evasive regarding whether product is for domestic use, export, or re-export
Export Compliance- Know Your Buyer
• US Government
• VEDP – Subscriptions– Program Partners– Overseas Trade Managers
• Other Resources: Free and Fee
Export Compliance- Know Your Buyer
Resource Review
Denied Persons List – by name of company and/or personhttp://www.bis.doc.gov/dpl/thedeniallist.asp
Unverified List – by name of company and/or personhttp://www.bis.doc.gov/Enforcement/UnverifiedList/unverified_parties.html
Entity List – by country, then company name or addresshttp://www.access.gpo.gov/bis/ear/pdf/744spir.pdf
Specially Designated Nationals List – by name of company and/or personEmbargoed Countries List- by country and type of sanction imposed www.treas.gov/offices/eotffc/ofac
Debarred List- by name of company and/or personhttp://www.pmddtc.state.gov/debar059.htm
Nonproliferation Sanctions- by name of person, entity, or governmenthttp://www.state.gov/t/isn/c15231.htm
General Order 3 to Part 736 (page 9)- by name of company and/or personhttp://www.access.gpo.gov/bis/ear/pdf/736.pdf
All conveniently located on ONE website! www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm
Export Compliance- Know Your Buyer“Bad Guy” Lists
One Website Has All Lists
Export Compliance- Know Your Buyer
www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm
Denied Persons List (USDoC)
Unverified List (USDoC)
Entity List (USDoC)
Specially Designated Nationals List (US Treasury)
Debarred List (US State Dept)
Nonproliferation Sanctions (US State Dept)
General Order 3 to Part 736 (USDoC)
Page 9
One Website Has All Lists
Export Compliance- Know Your Buyer
www.bis.doc.gov/ComplianceAndEnforcement/ListsToCheck.htm
**NOTE**
Some freight forwarders offer to verify all government lists for a specific client/buyer for a fee. Check with them for rates and availability.
VEDP Subscriptions (fee)
• Hoovers – Dunn & Bradstreet Company– Limited financial information on some companies– By company name– 5.7 million entries– Mainly US and UK
• Kompass– By company name– 1.9 M in 70 countries
• Interdata and Other Online Networks– By company name– Self-reporting
Export Compliance- Know Your Buyer
Also can include: Recent sales data, key players, major competitors
VEDP Subscriptions- Hoovers
Export Compliance- Know Your Buyer
Codes unique to Kompass help specify a company’s product(s)
VEDP Subscriptions- Kompass
Export Compliance- Know Your Buyer
Law FirmLECLAIR RYAN Peer Segelke: [email protected]
BankingSUNTRUST: Marsha Sompayrac:
[email protected] Hai nah Ellison: [email protected]
Web Optimization ACTIVE MEDIA Laszlo Horvath: [email protected]
Language ServicesTNB LANGUAGE Ralph Bosen: [email protected]
Program Partners
TNB LANGUAGE SERVICE
Export Compliance- Know Your Buyer
Freight Forwarding, Logistics
CVI Mike Coleman: [email protected]@cvinternational.com Venetia Huffman: [email protected] Linda Norman: [email protected]
U.S.Export Compliance
ALLEGHENY James Loux: [email protected]@acustomsbroker.comSusan Kovach: [email protected]
Strategic PlanningCAPSTONE John Dearing: [email protected]
Gretchen Johnson: [email protected]
Partners may be able to provide:• Access to other databases• Foreign offices for reference• Industry experience & expertise
Export Compliance- Know Your Buyer
VEDP Overseas Trade Managers
One-on-One Export Marketing and Counseling*
• Five VEDP offices worldwide
China, Japan, South Korea, Mexico, Brazil
• Able to contact companies directly
• May have experience with target company
*Availability of OTMs will depend on VEDP trade schedule
Export Compliance- Know Your Buyer
Other Resources
U.S. Department of Commerce– International Company Profile (≈$300-500)
http://www.buyusa.gov/malaysia/en/intl_company_profile.html
American Chamber of Commerce– Foreign Affiliates - 94 AmChams in 82 countries
http://www.uschamber.com/international
Business & Trade Associations – List on MAP #4B for target market
Export Compliance- Know Your Buyer
Foreign company titles (Inc, llc, etc.)
www.export911.com/e911/export/export.htm#xForeign
Background checks (fee):
www.marsh.com
www.krollworldwide.com/services/screening/international/
www.dnb.com/us
www.icsworld.com/background_investigations_checks.asp
www.coface-usa.com
Other Resources
Export Compliance- Know Your Buyer
Verifying Financial Risk
Contracts with Clients/Buyers
INCOTerms
Foreign Currency Exchange
Overseas Banks
Taxes
Contracts
Are there common pitfalls to contracts in your target market?
Goal: A contract with opportunity for legal recourse and clearly defined roles for both parties
Are there legal issues surrounding representative or distributor agreements? Does the target market uphold intellectual property rights?
Goal: Avoid an overseas relationship that leaves you open to liability
Verifying Financial Risk
INCOTerms
Universal set of rules for conducting international trade
Exporter communicates INCO Term details before sale
Goal: Negotiate with client/buyer for the least risky INCOTerms for the sale
Verifying Financial Risk
Foreign Currency Exchange
Can US$ circulate in the country? Does it ever leave?
Goal: Make sure that your sale terms can be upheld in your target market, and get paid what you negotiated!
If you’re being paid in another currency, what is the exchange rate? What bank fees will be applied in the U.S. to convert it?
Verifying Financial Risk
Overseas Banks
Determine the banking structure of the target market. Is your client/buyer’s bank large or small?
• Risk receivable insurance
• US bank acceptance of wire transfer, intermediaries
Verifying Financial Risk
Taxes
Do VAT or GST taxes apply? What kind of incentives are in place in the U.S. to recover taxes?
• Frequent changes to tax law, incentives for recovery available
• Staff / offices overseas could lead to taxes spent overseas
Verifying Financial Risk
Resources (free)
The Economist.comwww.economist.com
International Monetary Fundwww.imf.org
World Bankwww.worldbank.org
Verifying Financial Risk
Due Diligence = Doing Your Homework
Control/Mitigate Risks Related to:
• Country (Market)
• Export Compliance
• Customer- Know Your Buyer
• Bank/Finance
What is Due Diligence?
Due Diligence is a Continuous Process
What is Due Diligence?
Questions?
