Page 239 - International Marketing

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BRILLIANT'S Export Management 241

3. Legal Risks: Commercial laws in two countries may differ. More-
over, conducting legal preceeding may differ or be complicated and ex-
pensive in the foreign country. To avoid the legal issue between the im-
porter and exporter, provisions in the contract itself can be made as to
which law shall be applicable in case of dispute or who will be the arbitra-
tor in case of difficulty.
4. Cargo Risks: Inspite of all modern developments in transportation
transit disasters still remain present in the shipment of goods from one
country to another. The importers and exporters are all aware of risks of a
long and dreary list of hazards, viz, fire, storm, collision, theft, leakage,
explosion, spoilage etc. Such risks may be transferred to and undertaken
by professional risk bearers known as underwriters. As most goods are
transported by marine transport, underwriters agree to insure the goods
for the transit risks.
5. Credit Risk: In business-domestic or foreign selling goods on credit
is very common. It becomes more important to sell goods on credit when
there is growing competition in the market. The position in international
market is not much different and no seller (exporter) can manage without
selling goods on credit. So we can say that credit risk is the risk of loss
that may originate from a consumer’s inability to reimburse the credit.

Export Credit Guarantee Corporation
Export Credit Guarantee Corporation of India Limited, was established
in the year 1957 by the Government of India to strengthen the export promo-
tion drive by covering the risk of exporting on credit. Being essentially an
export promotion organization, it functions under the administrative control
of the Ministry of Commerce & Industry, Department of Commerce, Govern-
ment of India. It is managed by a Board of Directors comprising representa-
tives of the Government, Reserve Bank of India, banking, insurance and
exporting community. ECGC is the fifth largest credit insurer of the world in
terms of coverage of national exports. The present paid-up capital of the
company is Rs.800 crores and authorized capital Rs.1000 crores. ECGC is
an alliance of lead independent garden centers for the change of information
and ideas and a joining of our resources to increase profitability, inspire
constant improvement and foster the highest professional standards in or-
der to serve our customers and our community.
Exporters are sometimes called upon to execute bonds duly guaran-
teed by an Indian bank at various stages of export business. An exporter
who desires to quote for a foreign tender may have to furnish a bank
guarantee in the form of a bid bond. If he wins the contract, he may have
to furnish bank guarantees to foreign buyers to ensure due performance or