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About managing exporting risk

Currency risk

What’s the risk?

  • The local currency amount receivable on settlement may be lower than the amount calculated when entering into the contract.

How does it arise?

  • Exchange rates between most currencies fluctuate regularly. There is a time lag between entering into a contract and making the payment.

How can it be mitigated?

Non-performance risk

What’s the risk?

  • The buyer refuses to pay. Efforts to enforce the contract cost money and detract from expected profits. 

How does it arise?

  • The buyer won’t acknowledge their obligation to pay.

How can it be mitigated?

Credit risk

What’s the risk?

  • The buyer isn’t credit-worthy – i.e., they aren’t willing and able to pay.

How does it arise?

  • The buyer, or other parties in the payment chain, becomes insolvent.

How can it be mitigated?

Transfer risk

What’s the risk?

  • A change in government regulations prevents or restricts your ability to receive payments or exchange foreign currency.

How does it arise?

  • Many countries regulate the transfer of money. Unexpected regulatory changes may take place between entering and settling a contract.

How can it be mitigated?

  • Consult the Australian Trade Commission (Austrade) for expert insights into the foreign markets where you trade. Consider insuring against transfer risk through specialised export credit insurance agencies. 

Country risk

What’s the risk?

  • A change in government regulations prevents or restricts your ability to receive goods.

How does it arise?

  • Many countries regulate the import and export of goods. Unexpected regulatory changes, such as the cancellation of permits or licences, may occur between entering and settling a contract.

How can it be mitigated?

  • Consult Austrade for expert insights into the foreign markets where you trade. Consider insuring against country risk through specialised export credit insurance agencies.  

Transport risk

What’s the risk?

  • Goods are stolen, lost or damaged in transit.

How does it arise?

  • Through deliberate or accidental causes.

How can it be mitigated?

  • Insure against transport risk with commercial marine insurance agencies.  

Risk of fraud

What’s the risk?

  • Unscrupulous buyers attempting to take advantage of exporters.

How does it arise?

  • People taking advantage of the complexity of international trade to commit fraud.

How can it be mitigated?

  • Research potential trading partners, including third parties, to ensure they are reputable and have proven track record. 

Related products

Methods of payment

We offer a variety of options to help exporters receive payment from their buyers in a mutually acceptable way.

Learn more

Financing options

There are several financing options available to help exporters manage cash flow.

Learn more

Talk to us

Call 1800 222 398

Call 1800 222 398

New Foreign Currency Account enquiries

(8:30am-5:00pm AEST, Mon-Fri) 

Important Information

As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances. View our Financial Services Guide (PDF 59kb).

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