How to reduce the risks of cooperation with foreign counterparties

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It is common practice to provide security measures for your business in advance when cooperating with foreign counterparties. What steps should be taken to do this? Identify risk areas and specify in the contract the degree of responsibility of the parties, measures to prevent the occurrence of risks and the consequences for the business if they occur. A detailed description of such provisions in the contract will characterize the company as a serious, competent partner.

If we are talking about a contract with a foreign counterparty, many provisions regarding risks are governed by international rules and the text of the contract only mentions a reference to one greece business email list or more of them. However, if the contract stipulates special conditions or the situation does not fall under any of the international rules, it is in the interests of both parties to reflect all the nuances in detail in the text of the contract.

For example, one of the important provisions is what law will be applied to resolve disputes if they arise and in which state the court will consider the application. It makes sense to think in advance about whether you will be able to defend your interests if the issue is dealt with by a foreign arbitration court using the laws of another country.

Court

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Arbitration proceedings are expensive, and if the company does not have enough money to spend on them, it may be difficult to prove the grounds for claiming losses. Therefore, it is better to immediately include a clause stating that if the case has to be resolved through the court, this will be done using Russian legal documents and in a Russian court.

There are other risks that you should think about in advance. And claims from tax authorities are not the worst thing. If law enforcement agencies catch you in transactions with a suspicious foreign counterparty, you may be charged with illegal transfer of funds abroad. And such actions already fall under Article 193.1 of the Criminal Code of the Russian Federation.

The so-called laundering of illegally obtained money (legalization), financial support of terrorist structures and other actions falling under Article 174 of the Criminal Code of the Russian Federation are criminal offenses. The Bank of Russia also recognizes transit operations as criminal actions.

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It happens that misunderstandings with a foreign counterparty arise already at the stage of cooperation. There are moments that can be foreseen in advance and thus avoid unnecessary difficulties:

Take into account the language barrier.

Unconstructive behavior of a foreign partner may be due to a banal misunderstanding - not because of a desire to harm your business, but because of the specifics of the translation.

Do not use the universal agreement as a template.

Be sure to weigh each aspect of the contract in detail from a legal point of view and taking into account the provisions of international law. Otherwise, you may open the door for the counterparty to fail to fulfill its obligations, and at the same time clip your wings.

Don't be too hasty and categorical in your judgments.

Even if you doubt your partner's integrity or ability to act, do not rush to write him harsh letters about it. They will only worsen the situation, complicate communication and mutual understanding. Collect your thoughts and find a way to understand the situation, avoiding sharp attacks and categorical judgments.

Don't put too much emphasis on a company's rating.

A company's wide reputation is not always a guarantee of fruitful and mutually beneficial