For Evan Buie, CITP, the path into international trade began with a genuine interest in global business and early career experiences that opened doors into the world of cross-border commerce.

“I had always been drawn to international business and took many courses covering the subject for my undergraduate degree,” he says. After graduating, he entered a role as Coordinator of International Relations in Hokkaido, Japan, giving him a first taste of what a career that spanned across continents and cultures would be like.

As it turns out, “taste” would become a thematic word in his career journey, beginning with his next two roles upon returning to Canada, ones that would see him serving two multi-national food and beverage giants.

Those opportunities became the launchpad into his first formal trade role. “This experience helped me secure my first position in international trade, focusing on East Asia and Oceania, with the Government of Alberta’s Export Development Team within the Ministry of Agriculture,” he notes.

Bringing Alberta exporters to the world and the world to Alberta

During his time with the Government of Alberta, Evan had the opportunity to host several delegations from overseas. One of his most memorable experiences came early on:

“One of my first delegations involved a Chinese chef and his social media team in Calgary. We went to cattle ranches and multiple local, hidden gem restaurants. Seeing their excitement when they tasted the local delicacies or seeing the Rocky Mountains for the first time was hugely enjoyable.”

He also recalls the energy of taking Alberta companies abroad: “I also had a chance to lead an Alberta delegation of companies to Japan for a three-city tabletop expo.”

“Seeing the companies in their element, talking with prospective buyers, and making deals is why I do the work I do. Karaoke was a blast too!”

These moments, equal parts cultural exchange and trade development, reinforced his desire to help Canadian businesses grow internationally, while fostering meaningful relationships with exporters overseas.

A major milestone: becoming a Trade Commissioner

“One of my proudest professional accomplishments was being hired by Global Affairs Canada as a Trade Commissioner,” Evan says, describing the achievement as a highlight of his career. In this role, he has taken on leadership of one of Western Canada’s emerging agri-food showcases:

“I’ve had the pleasure of co-leading the Taste of Western Canada, a food and beverage tabletop showcase held during the iconic Calgary Stampede.”

A huge undertaking, the third iteration of the show will bring together 80 Western Canada agri-food and beverage companies and over 75 domestic and international buyers, making it one of the most targeted food and beverage events in all of Western Canada. “Its potential for further growth is enormous,” Evan states.

Discovering that business results don’t happen overnight

Over the years, Evan has developed a deeper appreciation for the persistence and patience required in global commerce. He notes that professionals in trade must have a deep level of dedication to make international transactions and partnerships come together. Reading about it may make it seem simple in theory, but “…it is another to live it.” he states.

“The time commitments that companies put into their international business development efforts can take years before they are rewarded. Overnight successes are not the norm.”

How FITTskills training strengthened his confidence

When Evan enrolled in FITTskills courses, he discovered how helpful comprehensive and structured learning could be. He enjoyed how the program pushed him to focus on the course content for an extended period of time, when otherwise, many topics may have only come up in passing or infrequently on the job. The fact that the topics were broken into digestible chapters made the process easier too.

In fact, the format became a practical tool he continues to rely on.

“I have since gone back to the textbooks for specific content when following up with clients. The courses have also made me feel more confident in my interactions with companies as I am better positioned to advise them on the FITTskills course topics.”

With his FITTskills training complete, Evan feels like a more well-rounded international trade professional, one that can confidently approach clients and international business with advice and solutions.

This confidence would become apparent after taking his favourite course, International Trade Finance: “I found it quite challenging as the content is material that I would have historically referred companies to other service providers for advice on (i.e. EDC), but I learned a lot and can speak more confidently to the content now,” he notes.

Pursuing the reputation of the CITP designation

Evan chose to apply for the Certified International Trade Professional CITP®|FIBP® designation to “highlight my educational achievement, knowledge obtained, and to add a reputable designation to my resume, LinkedIn page, and signature line,” he says. It’s a credential he views as both reputable and meaningful, something worth showcasing across his professional profile.

Earning it was also another proud milestone to add to his career highlights. Understanding how valuable the designation can be going forward, he feels it adds another layer of credibility to his work:

“I’ve been told that if I were to apply to a job in the future, and all things being equal otherwise, the candidate with the CITP designation would get the job.”

A bright future building Canada’s trade relationships with other countries

As he continues to support Canadian businesses entering international markets, Evan’s CITP designation will help reinforce the guidance he provides, grounded not only in experience, but in globally recognized best practices. It will also, if his trend in food and agriculture continues, be filled with flavourful adventures.

The post CITP Spotlight: Evan Buie – Trade Commissioner, Global Affairs Canada appeared first on Trade Ready.

For Marc-André Beaupré, CITP, a career in international trade wasn’t something he set out to find—it was something he grew into through curiosity, determination, and an appreciation for global business. 

Before joining Export Development Canada (EDC), Marc-André worked in the banking sector and frequently collaborated with EDC teams. Those early interactions made a lasting impression.

“I collaborated with them on many clients. I was impressed by their knowledge and what they were able to do to help entrepreneurs export or import products or services,” he explains. 

He also felt drawn to the global mindset that EDC embodied.

“I always had an interest in other cultures from around the world. So, when the opportunity came to become an employee, I took my chance and applied. Four years later, I’m still as happy as I was on my first day working here.”

A career built through perseverance and reinvention

When asked about his favourite career story, Marc-André doesn’t point to a single transaction, project, or deal. Instead, he points to the journey itself: “My career so far is my favorite story,” he reflects. 

That journey began far from the world of finance. “When I finished high school, I earned a vocational diploma in machining. I worked for about two years in that industry before realizing that I wanted more.” That realization led him back to school to complete his B.A.A. (Bachelor of Business Administration), marking the beginning of a complete career pivot. 

“Having no financial background or experience in the banking business, I started from the bottom and worked my way up to becoming a Senior Account Manager in the business sector and now, a Senior Relationship Manager at EDC.” 

It’s a path built on determination—one that mirrors the resilience required for international business itself. 

Supporting Canadian exporters through strategic insight

As a Senior Relationship Manager at EDC, Marc-André now works closely with companies seeking to grow beyond Canadian borders. His progression into this role has been shaped by each step of his earlier experience—from frontline banking to complex client portfolio management. 

“The path I took to get to where I am today,” he says, is one of his proudest professional accomplishments.

That path has equipped him with a deep appreciation for what exporters face every day. His work now involves supporting businesses as they navigate risk, access financing, and pursue international opportunities—something he finds both challenging and rewarding. 

A crucial lesson: confidence matters

One insight Marc-André wishes he had gained earlier is the importance of trusting yourself in a constantly shifting industry. 

“Don’t doubt yourself. International trade is complex and always different. That’s what makes our job so interesting and captivating.”

It’s advice that many international trade professionals learn only after years in the field, and it speaks to why continuous learning is so highly valued throughout his career. 

How FITTskills enhanced his work with exporters

Marc-André credits FITTskills training with strengthening his ability to support clients more effectively.

“FITT helped me better understand the reality of an exporter. Helped me have better conversations and provide better counsel for my clients. It enhanced my knowledge of the international trade business.”

His favourite course? “International market entry strategies. Because you learn about other culture and way of doing business to make sure that your strategies will succeed.” The frameworks, models, and case-based learning have become tools he applies daily when advising businesses preparing to scale globally. 

Why the Certified International Trade Professional (CITP®|FIBP®) designation mattered 

Encouraged by other certified professionals, Marc-André saw the CITP designation as the natural next step in deepening his expertise. “Thanks to other graduates holding the certification, I was looking for a way to deepen my knowledge of the international market, and the CITP seemed to be the best option.” 

Earning the certification became a meaningful personal milestone—especially given the challenges he faced balancing career and family. 

“I feel proud, because I worked full-time, had a one-year-old baby when I started, and still managed to take and succeed in all the requirements and courses to get the CITP designation.”

A credential that strengthens long-term career growth

Marc-André views the CITP as a powerful enabler for future opportunities. “I foresee my CITP designation playing a significant role in my future career by enhancing my credibility and expertise in international trade. This certification not only validates my knowledge but also equips me with the skills to navigate complex global markets effectively.” 

He also recognizes the value of joining a global network:

“Being part of the CITP community allows me to stay updated with industry trends and best practices, ensuring that I remain at the forefront of the international trade sector.”

With grit, resilience, and determination shaping his success so far, Marc-André’s trajectory is clearly moving in one direction—upward—with no signs of slowing down. 

The post CITP Spotlight: Marc-André Beaupré — Senior Relationship Manager, EDC appeared first on Trade Ready.

For Ted Lomond, CITP, international trade isn’t an isolated field—it is the progression of a career devoted to business and economic development. His path through high-profile government positions, global market strategy, and the renewable energy sector underscores this path, one that has seen him build powerful relationships that shape regional and international growth.

His early work as Deputy Minister responsible for International Trade and Tourism for the Government of Newfoundland and Labrador showed him how trade can strengthen industries and communities alike.

“I worked directly with industry to promote economic development through trade,” he says. It’s a foundation that prepared him for his current role as President and CEO of North Atlantic, an Atlantic-based energy company now moving confidently into international renewable markets.

Expanding industries and horizons

Throughout his career, Ted has had a front-row seat to the growth of companies aiming to expand internationally. His favourite stories often come from watching small, rural businesses flourish either in new markets or locally.

“It was always rewarding to see companies—particularly those from small rural communities—be successful in international markets.”

For example, “One small aviation training company I worked with went on to become a major employer in the region,” he recalls.

Leading the future of clean energy exports

Today, Ted’s ambitious work centers around leading North Atlantic through the global energy transition. His mandate is far from small.

“Right now, I’m leading a regional energy company through energy transition using cost discipline and aggressive diversification into low-carbon product lines such as hydrogen and its derivatives, renewable diesel, and energy efficiency,” he explains.

North Atlantic’s growth strategy includes developing global markets for renewable energy, backed by major infrastructure plans. These include a 320 MW wind farm, a hydrogen generation plant capable of producing 30,000 tonnes of green hydrogen, and a hydrogenation plant that converts hydrogen into a Liquid Organic Hydrogen Carrier (LOHC) for export.

At the same time, North Atlantic has been pursing international expansion and recently completed the purchased the second largest refinery in France at Gravenchon. Operating as North Atlantic Energies, they are now a major player in the downstream oil sector in France and are assessing the potential for green hydrogen produced in Newfoundland and Labrador to replace a portion of the grey hydrogen used at the facility.

Projects of this scale require deep international trade knowledge—from regulatory alignment to logistics, financing, and market analysis. It’s one of the reasons Ted’s background and experience in trade is so valuable in the fast-moving renewable sector.

Prepare well, follow up consistently, and exercise patience

Throughout his career, Ted has seen countless companies pursue international markets, and he’s learned that success rarely comes quickly or easily.

“Determination and patience are required. You need to commit the necessary time and resources to develop new markets.”

He has also often witnessed companies approach trade missions or foreign meetings without doing the groundwork required. “I have been involved in numerous trade missions and too often have seen firms not preparing in advance. Without understanding your potential customer, you are not able to articulate what problem you can solve or the value you can bring.”

Equally critical, he adds, is making the effort to circle back with contacts—even if it’s simply to say thanks.

“I have seen firms not properly follow up with leads. Many times, companies return from international business meetings and fail to reconnect in a timely fashion or even thank potential customers for the meeting. Sometimes the organizers of trade activities contribute to this by focusing on the number of attendees vs. the readiness of participants.”

Applying FITTskills knowledge to his leadership role in the energy sector

When Ted began steering North Atlantic toward international renewable energy markets, the FITTskills program helped expand his perspective.

“I thought the courses were comprehensive and useful given my current role leading a company focused on the successful export of renewable green hydrogen from Newfoundland and Labrador to Europe.”

Because the hydrogen sector is so new, “pricing, offtake durations, transportation routes, and means of conveyance are still in flux,” the courses add value during the formative stages of working in this emerging sector.

He found International Trade Finance particularly useful, in this regard, citing it as his favourite course. “Some of the material was new to me and has been useful as we look at the types of financing that will be necessary for developing new, less carbon-intensive industries.”

Gaining a “common language” with the CITP

In developing markets for clean hydrogen, Ted regularly collaborates with international partners, governments, and export development agencies. Many individuals within these groups hold the Certified International Trade Professional (CITP®|FIBP®) designation, and that peer recognition played a role in his decision.

“I see the advantage of having the CITP designation as a means of establishing a common language and approach to the work,” he says.

In addition to creating useful dialogue between contacts, the CITP designation was also indicative of his constant learning mindset: “I am definitely a lifelong learner and enjoy learning new things. I feel the CITP designation is a significant credential and I have a sense of accomplishment having achieved it,” he says.

Looking ahead, he sees the credential as both a professional signal and a strategic tool.

“I think the CITP designation will serve as a sort of shorthand in quickly conveying information about my education and experience. I’m looking forward to engaging the network of other CITP credited individuals working in international trade.”

A leader shaping Canada’s renewable trade future

Guided by strategic insight and a long-standing commitment to economic growth, Ted Lomond has become a driving force in Canada’s transition toward renewable energy. At the helm of one of Atlantic Canada’s most forward-looking export initiatives, he is helping carve out Canada’s place in fast-growing clean-energy markets around the world.

With his CITP designation underscoring the depth of his international trade expertise, Ted continues to build strong global partnerships and set the pace for what Canada’s energy future can look like. There is little doubt he will remain a defining leader in both the trade and clean-energy spheres for years to come.

The post CITP Spotlight: Ted Lomond — President & CEO, North Atlantic appeared first on Trade Ready.

For Yewande Olubowale, international trade has always been about more than transactions—it’s also about how trade drives the global economy as a whole.

As a Trade Advisor at the World Trade Centre Winnipeg, she helps Manitoba businesses navigate the intricate pathways of  international markets, combining her experience in trade finance with a passion for helping others thrive internationally.

Two areas initially spurred her interest in international trade: Treasury and Trade Services.

“I was particularly drawn to the dynamic nature of cross-border transactions, which combines finance, logistics, and risk mitigation strategies. I found it fascinating to help businesses navigate these complexities.”

Finding purpose in the flow of global commerce

After university, Yewande began her professional journey in banking through a three-month graduate training program. Her early years in this industry honed her ability to blend financial acumen with international trade strategies, whether for risk mitigation, logistics, or cross-border transactions.

She was able to apply this learning later in her career while working as an international trade professional for FBNQuest Merchant Bank, where she drove digital transformation that garnered major results.

Using innovation and insight to move countries forward

One of Yewande’s most defining achievements was her role as a delegate representing FBNQuest Merchant Bank on a national transformation initiative led by the Central Bank of Nigeria. As part of the electronic Certificate of Capital Importation (eCCI) automation project, she was entrusted by her employer to support the CBN’s initiative of translating regulatory intent into a functional, scalable digital process.

She details, “The CCI is a document that verifies an investor’s foreign direct capital investment into Nigeria, this could be in the form of cash, goods, equity, or debt. This project transitioned the process from paper-based documentation to a streamlined digital system, significantly improving the facilitation of foreign investments, capital repatriation, and regulatory compliance in international trade.”

Through this work, Yewande contributed immensely to the modernization of a critical national trade infrastructure, reducing friction for foreign investors and strengthening confidence in Nigeria’s capital inflow processes.

It also highlighted Yewande’s ability to bridge innovation with  trad finance regulations—all core elements of her career success.

A creative mindset to solve complex challenges in the oil and gas sector

Later in her career, Yewande took on the role of Trade Services Officer, exposing her to a wider range of industries and increasing complex transactions. . One of her most memorable experiences required  her to use her problem solving and deep trade finance knowledge to enable  the export of crude oil for a corporate client.

“The transaction was challenging due to the complexities of the oil and gas industry, regulatory controls  and the high value of the shipments. To mitigate payment risk, I coordinated a letter of credit between the buyer and seller and worked with local and international parties, including customs authorities, shipping agents, and our correspondent banks.”

Navigating both the commercial and regulatory hurdles of the trade, the export was executed successfully and payment was received on time, strengthening the client’s relationship with the buyer.

“This experience highlighted the crucial role of trade finance in the oil and gas sector and the bank’s impact on the industry.”

It also highlights the importance of creative problem solving in international trade.

Opening doors through trade show readiness

While working as a Trade Advisor at the World Trade Centre Winnipeg, Yewande supported a Manitoba based jeweller preparing to exhibit her collections at an international trade show. The business owner was unsure how to take high value pieces abroad for display without selling them, and how to navigate the customs and regulatory requirements involved.

Yewande provided clear guidance on the applicable trade and customs rules ensuring the jewelleries could be transported, exhibited and returned without compliance issues. She also identified export support programs relevant to the client’s business and worked closely with the entrepreneur to strengthen her trade show readiness.

Beyond the exhibition itself, Yewande introduced the business to industry partners and trade networks to help expand its reach as well as open doors to future opportunities, giving the jeweller the support required to navigate confidently into global markets.

Yewande says:

“Successful international trade isn’t just about getting into new markets; it’s about understanding the rules so businesses can grow internationally with confidence”.

A commitment to learning and leadership

For Yewande, professional growth is rooted in continuous learning. Her decision to pursue FITTskills international trade training came from a desire to strengthen her technical knowledge and keep pace with the rapidly changing global trade environment. Her goal was to improve her service offering to the Manitoba businesses that are taking organizational and financial risks everyday by growing their operations internationally

“It was an enriching experience,” she says.

“I appreciated the real-life examples provided in the courses, which offered valuable insights into practical situations in international trade. The courses served as a great refresher, enhancing my ability to provide knowledgeable advice to the clients I support including international pricing strategies, market research reports, and international regulations, to name a few.”

Yewande offers sound advice to new professionals in the field of international trade: take bold steps.

She clarifies, “By thinking beyond immediate challenges and focusing on long-term goals, you can make more strategic decisions that lead to sustained growth and success.”

A favourite: The value of the Global Value Chain course

Yewande’s favourite FITTskills course was Global Value Chain. To her, the course gave her valuable insight into the complexities her clients face in their global operations.

“It was highly engaging and provided a comprehensive breakdown of supply chain operations, along with strategies for managing the risks of doing business across borders.”

Through this training, she has been able to bring even greater value to her role at the World Trade Centre Winnipeg—equipping entrepreneurs and exporters with strategies that help them expand confidently into international markets.

Earning the CITP: A milestone of mastery

Motivated by her passion for growth and supported by her employer, Yewande pursued Certified International Trade Professional (CITP^®|FIBP^®) designation.

“I applied for the CITP designation driven by my commitment to continuous learning and added value service to my clients, which aligns with my professional goals and career growth,” she shares, adding “I am grateful to my current employer, WTC Winnipeg, for supporting my aspirations and investing in my professional development.”

For Yewande, earning the CITP was more than an academic milestone—it was a symbol of her professional evolution.

“Earning the CITP designation is another feather in my cap and a truly rewarding experience that motivates me to continue striving for excellence. It reaffirms my commitment to ongoing professional development and further deepening my expertise in international trade.”

“I’m proud of my career growth, not only for my benefit but also that of the Manitoba businesses that I am privileged to work with at World Trade Centre Winnipeg.”

Looking ahead: Building stronger trade ecosystems

Today, as she continues advising Manitoba businesses on international expansion, Yewande sees the CITP as a bridge to new possibilities. “I believe the CITP designation is a valuable asset for advancing my career, as it will enhance my professional credibility and enable me to better serve the businesses I support,” she explains.

The designation also strengthens her connection to a global community of trade professionals.

“It provides opportunities to build a strong network across the international trade ecosystem, allowing me to collaborate with industry leaders and help drive growth within the trade sector.”

With great achievements already under her belt, Yewande is already making an impact in the trade sector, and with her strong growth mindset we can’t wait to see what the future brings.

The post CITP Spotlight: Yewande Olubowale, Trade Advisor at WTC Winnipeg appeared first on Trade Ready.

For Kingsley Borello, international trade has been more than just a career path, it’s been a calling since childhood. His earliest memories are of peering through the glass walls of his father’s meeting room, watching conversations unfold in languages he didn’t yet understand.

“I was fascinated how he could speak incomprehensible languages, and work in such a fascinating job: cheering people, spending hours at restaurants and travelling around the world,” he recalls. “What a fantastic job, I thought!”

That sense of wonder never left him. As he began his university education, he committed himself to business and languages, determined to one day follow in his father’s footsteps. What began as a childhood dream turned into a lifelong adventure that has taken him across continents, industries, business models, and eventually to his current role as CEO and Founder of TradeToWorld Marketplace.

An unforgettable hands-on introduction to global trade

While many professionals start their international trade journey with textbooks and case studies, Kingsley’s first real experience came through an extraordinary trip  that changed the trajectory of his life. In 1991, he travelled with his father to Conakry, Guinea in West Africa, where they explored the possibility of launching a new fish export business. Kingsley remembers the excitement of sailing alongside local fishermen and witnessing the inner workings of international business at such a young age.

“It was amazing: meeting people from around the globe side by side with my father, sailing in a fishing boat, and sitting with him in his business meetings with local authorities and businessmen”.

Eventually, his father successfully launched this venture, exporting fresh fish to Europe from Africa. But, as is frequently the case in international business, unforeseen circumstances required him to pivot. Understanding the repercussions of the political instability in the region, his father took a risk-averse approach and minimized his investments, keeping his trade infrastructure to a minimal level.

He then shifted gears with a smart and sustainable strategy. Rather than investing in expensive offshore fleets, he partnered with individual fishermen to generate enough fresh product for rapid export.

“Upon a collective agreement, he had a dozen of them leaving early in the morning, fishing and putting the fish is small thermal containers with ice, coming back by lunchtime, dropping all fish to some couriers at the port who were bringing the boxes in collecting points, where everything was consolidated on pallets and directly sent to the airport – all in the same evening!”

For Kingsley, the experience was unforgettable and formative. It instilled a deep appreciation for local partnerships, cultural understanding, and risk-aware planning, themes that would become cornerstones of his own career.

A career built on global entrepreneurship

Kingsley has since built a vibrant international career, spanning multiple countries, industries, and innovative business ventures. He describes his entrepreneurial path with joyful enthusiasm, and it’s clear he has never stopped seeking new challenges.

Some of his notable achievements include:

• Publishing his first book at just 25 years old, and, later, a second book that has been translated and sold internationally
• Supplying The Four Seasons Hotel in Austin, Texas, through a local import/export venture
• Negotiating two major master franchising agreements for a coffee roaster with investors in Saudi Arabia and the UK
• Being appointed to the board of a company managed by a Saudi Royal Family office member
• Opening a flagship store in Singapore and managing everything from company formation and hiring to importing goods and launching sales

These milestones illustrate a professional life marked by versatility, resilience, and a strong drive to expand possibilities in global markets. And through it all, he has never stopped learning.

“You have to be curious and fascinated by other cultures,” he advises.

“Try to speak their language, understand how they live and what they think. And possess an entrepreneurially creative spirit. These two key ingredients naturally create trade opportunities and business.”

Formalizing expertise with FITTskills Training

After years of hands-on experience, Kingsley decided it was time to reinforce his international trade knowledge with formal FITTskills training. Returning to studies proved valuable and invigorating:

“It was indeed interesting to come back to theoretical studies after a long period of trade experience in the field. You always learn new things.”

Though he found all the FITTskills courses interesting, one stood out: International Trade Finance. He enjoyed its technical and informative approach to finance, two attributes which are important when competing in ever-fluctuating international markets and currencies.

A clear vision of international business certification

Taking the FITTskills courses bolstered Kingsley’s formal training, but he knew from the get-go that he wanted to earn his CITP designation:

“In reality, since the beginning of my FITT courses, I knew that once I passed, I would apply for the CITP designation.”

The move would help him open doors in the North American market while offering industry-backed credibility to his already impressive global trade experience.

“Being a newcomer with a limited network versus my wider international relationships, I feel that the CITP designation brings more awareness of my professional background and capabilities, especially in Canada.”

Once he earned his certification, he felt a sense of belonging in the FITT community:

“It was a great pleasure to join the FITT family with the recognition of my experience.”

What’s next?

Kingsley sees the CITP as a vital marker of credibility, a signal to potential partners, investors, and collaborators that his global expertise meets recognized professional standards.

The CITP designation has already helped Kingsley engage with the Canadian trade community more quickly and confidently, which is opening doors for his latest venture.

TradeToWorld Marketplace reflects his belief in global inclusivity, small-business innovation, and the power of technology to unite markets that traditionally struggled to connect, a huge part of his upbringing that he hopes to elevate with his business. The innovative B2B marketplace was designed to empower thriving, ethical, cross-border commerce partnerships.

From watching his father work with independent fishermen in West Africa to writing books and starting several businesses, Kingsley has lived life fully and shows no signs of slowing down. He remains driven by the same passion that started it all—the excitement of building relationships across cultures.

In addition to learning about trade, “you have to live it,” he states.

And there’s no doubt that he is doing just that, every single day.

The post CITP Spotlight: Kingsley Borello, CEO & Founder of TradeToWorld Marketplace appeared first on Trade Ready.

“Who’s paying them?”

Small businesses in the U.S. have reportedly been hit hard by the tariff announcements. Many of them import goods from overseas and are the ones responsible for paying the tariff costs, which are essentially taxes placed on foreign products brought into the import country. Big-box retailers like Walmart don’t face this same financial burden. They have the competitive advantage and the leverage to pass tariff expenses onto their overseas suppliers if necessary.

Amid new trade policies, buyers and suppliers are reviewing the terms of their trading partnerships. Some are negotiating proactive solutions in response, including how to address payment and any new added costs from tariffs.

Whether it’s the overseas supplier who will have to absorb tariff prices or the importer who ends up covering them, trade finance can be used to protect and improve cash flow for both buyers and sellers across the international supply chain.  It’s also a means for buyers and sellers to negotiate more favorable payment terms with one another, so all players can proceed with strong, stable cash flow when doing cross-border business.

Win-win tool for dealing with tariffs

For businesses trading internationally, sorting out payments during the tariff rollouts is likely a top priority. Small, midsized and larger companies are all involved in this new trade playbook and are all part of getting a product to market.

In this trading web of exporters, importers and other supply partnerships, someone will have to either absorb, pass on or split tariff charges.

Just like it has been during other supply chain events, including COVID-19 and geopolitical disruptions, trade finance can be a solid tool to help companies bridge cash flow between raw material procurement, production and payment receipt. It can be used to finance longer payment terms between the buyer and seller, so that sellers get funded right away while the buyer can pay at a later date.

Fun fact: Trade finance already supports 80-90% of global trade, according to the World Trade Organization. This financing ensures that both parties in a commercial transaction have the cash they need, especially if prices spike, like in the case of tariff charges.

Financial flexibility during times of transition

Tariffs are determined by the country of origin and the type of product being imported.

Right now, a lot of companies are talking about the uncertainty tariffs are causing for their business. Some however have anticipated tariffs and have already adjusted their business strategies accordingly, including price adjustments with suppliers, inventory stockpiling, diversifying their sourcing and supply chains, and focusing on additional markets outside U.S.

Those companies that haven’t already gotten the ball rolling on these adjustments are likely in the process of considering their options now that tariffs have shaken up trade norms.

As companies reassess their tactics, trade finance is a flexible solution that can adapt to a business’ evolving needs.

If a company, for example, shifts sourcing from one country to another, or partners with retailers in new markets, then a trade finance firm can help facilitate seamless transactions between buyer and seller – including the payment terms between the two.

The mechanics behind trade finance

Trade finance is a set of financial tools that improve cash flow, mitigate trade risk, and unlock business growth.

One type of trade finance is known as export factoring. Using export factoring, companies can sell their receivables or invoices to a financial intermediary. The financial intermediary then provides up to 90% of the invoice amount to the company upfront and in cash.

The concept behind export factoring is that businesses choosing to use it can get paid right away, rather than having to wait months to collect payment from their buyers.

For reference, recent data showed that a large U.S. buyer takes an average of 54.7 days to pay their invoices. Businesses can be strained financially if they have to wait that long to get paid.

Aside from the immediate liquidity export factoring provides, non-recourse export factoring also includes credit protection that ensures you get paid even if your customer defaults. Collection services are also part of export factoring arrangements, where the trade finance company acts as an extension of a business’s “back office”. With collections services, the trade finance company handles payment collections and supports exporters as they navigate and work with buyers in foreign markets.

Supply chain finance is another type of trade finance, but it is often initiated by the buyer, rather than the seller. Through supply chain finance, a retailer can offer its vendors early funding, equipping them with the cash to maintain operations and keep up with orders.

Like export factoring, supply chain finance helps suppliers get paid faster while giving buyers longer windows until payment is due. This dynamic ultimately allows buyers and sellers to have more cash on hand, a crucial element for general working capital – and with the handling of tariffs.

The upshot

As the tariff and international trade landscape evolves, trade finance, and the age-old technique of factoring your receivables to secure payment upfront can prove to be the right antidote to optimize cash flow.

No matter where the tide turns next, trade finance tools offer a potential safety net for companies engaged in international trade.

The post How to use trade finance tools to gain flexibility during trade policy upheaval appeared first on Trade Ready.

Manpreet Kaur’s career in international business brought her from marketing vehicles like tractors and cars to managing risk in international trade financing. When her career and passions brought her from India and Canada, she recognized that the CITP designation would be an asset as she established herself in a new country.

She found that earning the CITP helped validate her global experience. Earning this designation wasn’t just a career milestone, but a strategic move to validate her extensive experience and enhance her credibility in a new country. Having an internationally recognized designation can help an experienced professional like Manpreet showcase her experience in a way many professionals trust and recognize.

Reflecting on her various roles in exports, marketing, and finance, Manpreet describes one constant throughout her career.

“My qualifications and my interests kept on leading me to develop in the profession of international trade.”

How education and a spark of inspiration directed her career path

Manpreet became interested in international business and trade while working on her MBA in India. At the time, she was especially fascinated with applying marketing techniques internationally.

During her third semester of her MBA, she started working for Sonalika International where she had the opportunity to work on market research, studying African markets. She took a few months off from her degree to immerse herself in this new job before returning to complete the degree. She especially appreciated the solutions-finding approach to international business that her training and education helped her hone.

“My boss said to me, ‘You’re an MBA, and an MBA is a person who never comes with a problem.’ They always come with the solution.”

“Yes, you have to perform. You have to be the person to give the solution.”

Whether earning an MBA or CITP designation, Manpreet has always sought opportunities to deepen her expertise while also continuing to gain practical real world experience.

Combining hands-on experience with a commitment to education

She moved on to a position with Honda Cars India Limited, where her international business background led to her working in the imports division. The cars were manufactured for Honda in India using parts imported from Thailand and Japan.

“This experience of seeing the whole process from imported components coming in, to assembly, and then either being sold locally or exported from India was fascinating,” she said.

She also took minutes during meetings with business delegates from China and from American engine manufacturer Cummins. Being present during these meetings helped to expand her knowledge of export processes and trade.

How her career evolved from marketing exports to trade finance

Within a couple of years, she started to pivot from marketing to trade finance when she accepted a position with ECGC Ltd (Export Credit Guarantee Corporation). She started from the ground up, as an executive assistant, and over the years, worked her way up to Senior Manager of the Buyer Underwriting Department, where her team managed underwriting risk for buyers across a portfolio of 20 countries.

She explained, “I gained a lot of experience in international trade finance, through a company that was under the Ministry of Commerce in the Government of India. It can be compared to the work that Export Development Canada does.”

She recalls an incident where her international trade experience helped her deal with the complexities of exports in the global market. An exporter’s consignment was stuck at a port in Iran as a result of default by the buyer. This exporter had taken a due cover from her employer. Manpreet applied her knowledge and established relationships to help that exporter get complete payment and fully resolve the issue.

“I leveraged my relations developed over a long period of time in the field and in the country to find an alternative buyer for the consignment in a matter of just about a week,” she recalled. The exporter and her managers appreciated how promptly she helped resolve the complicated issue.

During her time at ECGC she was promoted from second-in-charge to branch head, and finally senior manager. Manpreet was also nominated as Young Professional Initiative member of Berne Union in 2019. She said she felt honored to receive this recognition from such a well-known organization.

Manpreet’s colleague shares this wonderful insight into her impact on the organization:

“I had the privilege to work with her, while she was in ECGC as a Senior Manager. She played a pivotal role in promoting exports of the country through her dedication and commitment to work.”

“ECGC and my organisation EEPCIndia, both under Ministry of Commerce & Industry, used to collaborate on many occasions, to promote and organise export promotion and trade finance efforts for Exporters in Jalandhar (Northern India ).

She was in command of her subject and used to convince her clients by virtue of her understanding and knowledge of international trade. ECGC, which was a lesser known organisation to exporters in insurance sector, became a popular choice for exporters due to her ability to sell her ideas and services. I enjoyed the ease of working with her and wish her success in her future endeavours,” says Opinder Singh, Executive Senior Deputy Director, EEPCIndia New Delhi.

Want to learn more about the Certified International Trade Professional (CITP®|FIBP®) designation? See why it’s the world’s most recognized designation for competency and credibility in global business.

How the CITP helped her relocate and get established in Canada

Manpreet became interested in opportunities in Canada while liaising with Export Development Canada (EDC) in her previous role at ECGC. While working towards obtaining her Personal Residency in Canada, Manpreet was hired by Intact Financial Corporation in 2022. She felt incredibly fortunate that she was able to find a job in Canada before arriving in the country.

After moving to Canada, she decided that she wanted to earn a certification that would help validate her extensive experience in India and help her establish credibility in a new country. She opted for the CITP “because this exactly matches to what I was looking for to validate my experience and knowledge so far in my career.”

She connected with the FITT’s certification team and then completed the Executive Path to the CITP.

“I felt elated when I received the email that I have obtained the CITP/FIBP designation,” Manpreet said.

“The CITP validates my years of experience, hard work and commitment to the field of international trade. I felt proud about the fact that my experience and knowledge have been recognized by a respected global organization.”

Looking forward to a bright future in international trade

According to Manpreet, the component of CITPs’ commitment to ongoing professional development motivated her to continue to improve her knowledge. She hopes it positions her well for strategic positions and leadership roles in Canadian companies.

“I think the CITP designation will open new career opportunities and help me to dive into future advisor and relationship management roles in support of exporters. I want to be an active participant in the world of international markets here in Canada and beyond.”

The CITP designation both play an important role in Manpreet’s future career plans. In addition to building on her experience and knowledge, having an internationally recognized certification helps her build trust with prospective employers and clients.

Manpreet has some great words of wisdom that she has seen play out in her own career:

“It’s your passion that drives you to do the work and your involvement that actually matters. If you have passion towards a field and you get into doing work that fascinates you, I think every person can do wonders in their field.

That’s how it’s worked for me. I was always fascinated by international trade from the day I did my masters I knew I wanted to do something in international business and I followed and chased my dreams.”

The post CITP Spotlight: Manpreet Kaur – Trade Credit Insurance Underwriter, Intact appeared first on Trade Ready.

While there are many risks inherent in international trade finance, there are also numerous methods of settlement in international trade available to exporters and importers to manage and mitigate risks.

In most developed countries, an organization can draw on a wealth of free or inexpensive expert opinions to assist with risk mitigation for financial transactions.

Major banks typically have large portfolios of international loan assets and maintain extensive international financial networks. To safeguard their interests and those of their customers, banks employ large staffs of political analysts and international economists, and are often willing to share their expert opinions and written reports.

Embassies and consulates abroad, as well as commercial officers, are valuable sources of political and economic risk information, and can refer their clients to local service providers abroad that can assist in obtaining more detailed information on commercial risks.

These resources can often provide information on a target country’s current business environment, as well as credit and business information about potential customers.

An organization should select the financial instruments that best address its needs and identified risks, as well as those that respond to the underlying dynamics of a commercial contract.

In general, importers and exporters must agree on terms and methods of payment based, in part, on the risks associated with planned transactions. Below you will find 4 methods of settlement in international trade you can use to reduce your risk.

Want to learn more about methods of settlement in international trade and other risk mitigation options? Check out the FITTskills International Trade Finance online course.

Risk Insurance

Businesses that engage in international trade can mitigate commercial risk and protect its interests through various forms of insurance, including:

• Political risk insurance
• Foreign accounts receivable insurance

Indeed, insurance options are available to address nearly every category of risk that suppliers and buyers could possibly encounter while conducting international commerce.

Political risk insurance (PRI) and accounts receivable insurance (ACI) are particularly common, and can be obtained from specialist private sector providers or, depending on the market, from public and private entities such as export credit agencies (ECAs).

Most ECAs were originally established as public sector entities that promoted exports by providing various financing and risk mitigation products and solutions.

In recent years, however, some of these organizations have been fully or partially privatized and have mandates that extend beyond their original public sector focus. In fact, just before the onset of the recent global financial crisis, many questioned the need for ECAs in international trade.

However, their critical value was demonstrated when the market collapsed and private sector providers retreated in panic. Variations on the ECA model continue to be numerous, with the approach and the scope of ECA-like organizations varying almost by country.

In any event, most ECAs continue to offer political risk insurance and foreign accounts receivable insurance, which are both important forms of coverage that can help exporters offset trade-related commercial risks. Some ECAs also offer medium-term buyer financing, which is another helpful tool for export promotion.

Risk Transfer

Many of the strategies mentioned in this section involve the transfer of risk from one party to another for a fee. Insurance, for example, transfers risk from an individual policyholder to a portfolio of clients managed by an insurer to disperse the risk among stakeholders whose premiums fund payouts against claims.

This usually occurs over time, as it is unlikely, under normal circumstances, that a material number of policyholders will present claims at the same time.

Another attribute of an organization that successfully mitigates and manages commercial risk includes the continual assessment of the relevant risks versus the associated costs of conducting global financial transactions.

For example, a very common loss suffered by exporters involves the commercial failure of the foreign importer, while, for importers, it is the failure or inability of the supplier to deliver the merchandise exactly as specified and when required. Sometimes, poor documentation will restrict or inhibit the export or import of merchandise.

Political and country risks account for a much smaller number of losses, but should also be considered when structuring a transaction.

The challenge for an organization trading internationally, whether importing or exporting, is to get to know and trust its foreign suppliers or importers and to balance this knowledge with the risk optimization tools available from a variety of sources.

An organization must then choose a form of settlement consistent with the assessed risk and its level of tolerance for that risk. The ongoing test will be to remain competitive—and commercially viable—while incorporating the risk of loss and the price of protection against such a loss, into the final price of the finished product.

Risk can also arise from factors beyond the good faith or control of the trading partners. If exchange controls are imposed by a government, the ability and willingness to pay is not sufficient to assure a successful conclusion to the transaction. The next section emphasizes the trade finance instruments which can be used to secure payment.

Learn about what impacts your cash flow and how to maximize it with this free FITTskills Lite resource. 

Open Account

Open account payments are essentially transfers of funds to the account of the exporter. Historically, open account payments have been used in trade between very stable and secure markets, such as the United States and Canada, or in intra-EU trade, and in cases where the trading relationship is established and trusted.

Open account payment terms are those under which the seller extends credit to the buyer, finances the whole sale and sends a standard invoice demanding payment within thirty to sixty days of receiving the goods.

In addition, terms are suitable for a very strong buyer-seller relationship with a creditworthy client. Much of the trade between Canada and the United States is done on an open account basis.

Trade on open account is also increasingly the preferred mode of payment across much of the globe.

This shift, driven by large global importers, introduces additional risk for exporters in that payment is affected after the delivery of goods and/or services, sometimes for as long as 90-120 days after delivery.

This method has some potential risks as the importer could, for example, become insolvent, or the country of import could experience political turmoil, preventing payment. In such cases, the exporter loses control, and usually title, to the goods and/or services and has limited recourse to recover payment.

From a documentation standpoint, aside from the commercial invoice that will be issued by the exporter in an open account transaction, this transaction normally also involves an ocean bill of lading (i.e. if ocean shipping was part of the agreed-upon terms and a shipping container of goods has been sent).

In these instances, the exporter will usually send all original copies of the ocean bill of lading (i.e. those issued by the shipper as receipt for the goods) to the buyer. The ocean bill of lading serves as the title to the goods so, upon receipt, the buyer (or the buyer’s designate) can present an original copy of the ocean bill of lading at the receiving port to get the shipment released.

Note that, in certain circumstances, it is possible for the exporter to authorize a release of the goods without an original copy of the ocean bill of lading. However, many exporters still rely on the courier to deliver original copies of the ocean bill of lading to the importer to prevent an unintended and unsecure release of the goods.

Payment in Advance

One of the methods of settlement in international trade not yet mentioned is payment in advance. In contrast, payment in advance (advance payment) is a payment that is made before receiving the good or service, so it presents the highest risk to the importer (i.e. given that the exporter could easily receive the funds and not carry through with the promised shipment).

Exporters sometimes require advance payments by importers as protection against non-payment or to purchase supplies to fulfill the order. Higher advance payments may be required for specialized products as a hedge against buyer default when it may be more difficult or impossible to sell the products to a another buyer.

If an importer wanted to have a pre-shipment inspection when paying cash in advance, he/she could hire a 3rd-Party Inspection service to visit the manufacturer and file an inspection report.

However, the cost of such an inspection would also add to the investment being made by the importer. So the credibility of the exporter in this sort of a scenario would typically have to be very high.

Even with the best intentions and good faith, factors such as political turmoil and other unforeseen events could prevent a willing and well-intentioned exporter from completing a shipment as promised.

As a result, payment in advance is rarely used for transactions that are structured on a recurring basis. However, advance payment is frequently used when the reputation of the exporter is well-established and the importer sees little risk in an advance payment.

Advance payment establishes the importer’s credibility when the exporter does not have sufficient confidence in the importer. In these situations, the initial payment in advance transaction is used to gain the confidence of the exporter, and it is often accompanied by negotiations that are intended to lead to better payment terms on subsequent transactions, such as open account, as described above, or documentary collections.

The post Getting paid: 4 trade finance instruments you can use to reduce your risk appeared first on Trade Ready.

The world of international finance can be broken into myriad fields, and within those fields, international finance professionals have a variety of backgrounds, experience and expertise. Because of the diverse opportunities available under the international-finance umbrella, those in the field may find themselves looking for ways to diversify or deepen their knowledge base by learning more about the different facets of international finance and trade transactions.

For those international finance professionals looking to branch out into new areas or delve more deeply into their current field of work, FITTskills courses provide meaningful professional development that can help grow careers and develop professional confidence. At the same time, the CITP designation – which factors in both skills development in international trade and experience in the field – provides validation to a professional’s expertise.

Below, three CITP designees share how their FITTskills coursework and CITP designation has helped them find more opportunity and meaning in their already successful careers in international finance.

Olutobi Kodaolu, CITP – International Trade Finance Supervisor, Guaranty Trust Bank Limited

Olutobi Kodaolu doesn’t have what would be considered a traditional background within the field of international finance. After graduating university as an anatomy student, Kodaolu took a job at Guaranty Trust Bank and completed banking school. He’s been working in the international trade division ever since.

Throughout his career, Kodaolu has counted many successes, including being part of the team that designed the transition from manual to digital processes for foreign investors within his home country, contributing to the review of his country’s Central Bank Foreign Exchange Manual, and championing automation processes within his unit for better processing times and full compliance. He has structured trade transactions in a variety of fields, including oil and gas.

Despite his successes, Kodaolu said his unconventional background led him to shy away from seeking out training within the field of international trade.

“When I began in International trade, I was introduced to many branches of trade, and I was reluctant to learn because they were broad and strange to me. My regret was that delayed in training myself. I would have started learning more about international trade earlier in my career.”

To expand his expertise in international trade, Kodaolu decided to complete the FITTskills program and seek his CITP designation through FITT. At first, Kodaolu found the courses somewhat overwhelming, but he was quickly drawn in by the interesting material, the real-world applications presented, and the easy-to-understand information. He also appreciated that he was able to complete his coursework at his own pace.

Kodaolu said the course on International Market Entry Strategies and Feasibility of International Trade exposed him to the pros and cons of international business engagement and to the importance of understanding laws, markets and strategies for new markets. Overall, the FITTskills program has given Kodaolu a better outlook of the international market.

With its recognition within the international business community, Kodaolu said he’s confident that his CITP designation will help him to further grow his career.

“I feel a sense of progress in my career that is not only knowing my job but having a designation to show to the world. The designation will help me advance in my career and give room for more challenges internationally, like new job offers and new projects.”

Matthew Lewis, CITP – Managing Director, Desjardins

Matthew Lewis found a natural transition into a career in international trade. He began his career as a commercial manager and followed a logical path, accepting a job as a manager of international trade at the National Bank of Canada.

“I wanted to take it to the next step and wanted to help businesses promote their importing/exporting endeavours.”

Through his career, Lewis has worked with large corporations on hedging solutions, something he has always found to be satisfying. Nevertheless, he also enjoys working with the SME sector, where the impact of education is more relevant. Lewis also spent time training new graduates for the field through the height of the 2008 financial crisis. After returning from a particularly long assignment in the Philippines, Lewis said he was amused to see the takeover of social media when he returned.

Working with a variety of clients in a variety of settings and situations throughout his career, Lewis said there is one revelation that’s had the greatest impact on his work – listen to the client’s concerns and address those first.

Lewis sought out the CITP designation as a way to showcase his expertise in the field.

“I wanted to have the recognition from my peers, but I also wanted my clients to know that my knowledge meant business.”

Even as someone with a solid foundation in the field of international trade, Lewis said he found the FITTskills courses to be robust and diverse, and they challenged him to think outside the box. There were also core courses, such as Feasibility of International Trade, that had a great deal of relevance for anyone working in international banking or finance.

Lewis said he’s proud to finally hold the CITP designation, and he’s excited to see where the designation will take him.

“Hopefully, it will take to me to new places in my career and surprise me along the way.”

Frank Okoye, CITP – Senior Financial Advisor, Scotiabank

Frank Okoye got involved in the field of international finance early in his career. Throughout his career, he has been involved with working in finance guarantees, international trade and product paper development for small businesses and medium market enterprises.

“It’s an exciting and challenging profession.”

The most important element within his professional sphere, according to Okoye, is stakeholder management and perseverance.

With an established career in international finance and trade, Okoye sought his CITP designation as a way to expand his professional network while building his expertise and gaining more professional knowledge of the trends and cornerstones of international trade and commerce.

Okoye said he’s excited to have earned his CITP designation, and he believes it will help him to gain more professional exposure and to have more insight into the field.

Kodaolu, Lewis and Okoye – with their different backgrounds and experience within international finance and trade – found meaningful professional development through the FITTskills coursework they completed, and they all look forward to seeing their careers grow with their increased knowledge base and the international prestige that comes with the designation.

The post 3 new CITPs in international finance talk about their career success appeared first on Trade Ready.

If you have a business, there are different types of risks you’ll need to consider. This article looks at the different types of financial risk and the trade finance instruments and practices designed to assist with effective risk mitigation techniques.

What Is Risk?

The concept  of  risk  within  the  context  of  international  trade  is  often  misunderstood. Every business in this world faces some level of risk. Whereas risk deters some companies from engaging in international business, it compels other businesses to launch international ventures.

Risk represents both an indicator of probable returns and an effective barrier to entry for competitors that are risk averse or those that lack key risk management skills needed to pursue a risky opportunity. The assessment of an identical risk will vary significantly across individuals and organizations based on their respective views and expectations.

A common myth is that risk is an undesirable element of international trade that must be eliminated. In fact, risk is an inescapable reality of international business, and risk elimination is often impractical, extremely expensive and usually undesirable. Risk is an excellent and closely correlated indicator of probable returns. Generally, the higher the perceived risk, the higher the return one can command for undertaking a transaction.

Risk can also be an excellent barrier against the entry of potential competitors. As such, risk is a valuable and instructive business element that companies should seek to understand, assess and optimize.

In most cases involving international trade, some risks will remain. Indeed, eliminating risk is generally not possible. Even when it is an option, it tends to be prohibitively expensive and unrealistic.

Risk mitigation is often referenced as an appropriate strategy, but many fail to consider that risk and return exist together—that a balance must be struck between the two.

The idea of optimizing risk recognizes that there is a cost associated with reducing and mitigating risk, and that a satisfactory compromise is required when determining how much risk to accept versus how much cost to incur in its further reduction or mitigation.

Despite the subjectivity involved in assessing risks, understanding the concept of risk is by no means guesswork. The subjective nature of risk assessment leads to different conclusions when different companies consider specific risks, as well as the acceptability of those risks and the measures required to manage them effectively.

For instance, executives of different companies might come to radically different answers to the following two questions:

• Should our company pursue business in a dangerous and unfamiliar market on the other side of the world to achieve a higher target financial return?
• Should our company cut its margins by 10 to 20 percent to put into place an effective risk mitigation strategy?

Answers to those questions will differ for across individuals and companies. For example, a multinational organization may deem a venture to be low risk due to that organization’s past success in other markets in the region. On the other hand, a small enterprise with limited resources and smaller networks may consider the same market to be extremely risky.

Optimizing risk recognizes that people and organizations tolerate different levels of risk, expect different returns for undertaking certain risks, and are prepared to absorb certain levels of cost related to risk management.

Be confident in everything an importer or exporter needs to know about payment, risk mitigation, financing, and the flow of goods and services. Learn more about this topic in the FITTskills International Trade Finance online course.

Trade finance instruments and practices are designed to assist importers and exporters with effective risk mitigation techniques. The risks, which can be mitigated through appropriately structured trade finance instruments or services include commercial risk, foreign currency risk, country risk, and bank risk.

Types of Financial Risk

Commercial Risk

Commercial risk refers to the risk of non-payment by an importer or the risk of non-performance by an exporter. From the importer’s or buyer’s perspective, this involves the risk associated with the foreign exporter’s or supplier’s performance under a commercial contract, especially in terms of providing the goods and/or services as specified in the contract within the time frame required.

In a reverse situation, the exporter may be concerned with the importer’s ability to pay for the goods and services in full and in a timely fashion. This risk is especially difficult to detect when the buyer is a private company, so its financial information is not publicly available to help provide insights on the company’s financial situation.

In both of these instances, there are several ways for organizations to assess potential clients in the target market before doing business with them.

Before deciding to grant a client credit, or a client committing to a significant down payment, an organization can ask other industry contacts about the firm’s reputation, as well as researching industry views and opinions on the prospective client.

However, on the international market, asking other staff members and meeting the buyer or supplier is not always feasible due to cost, time and need for efficiency.

The assessment of commercial risk is therefore challenging and somewhat dependent on the financial position of the company doing the assessment. However, several highly specialized financial tools exist to assist which can help in the mitigation of commercial risk.

Foreign Currency Risk

Foreign currency (FX) risk is another important risk that must be considered by organizations trading internationally. This risk results from fluctuations in exchange rates because the transactions are most commonly denominated in major currencies, whereas exporters and importers may be conducting business in an entirely different currency. Indeed, fluctuations in the values of currencies represent a critical risk—which is often overlooked—when assessing the risk of an international venture.

In most trade transactions, at least two currencies are involved, and three is common. Consider the example of a Brazilian exporter and South African importer that complete transactions in U.S. dollars. This involves transactional exposure whereby the value of export receivables or import payables is adversely affected by exchange rate movements while the exporter is waiting to be paid.

This can cause a loss for the international exporter, but a careful risk analysis can enable the firm to structure its operating exposure while also negotiating appropriate terms of trade. Financial instruments also exist to assist in the mitigation of FX risk.

Adjusting to Foreign Exchange Fluctuations

Favourable shifts in foreign exchange rates can also occur for either importers or exporters, where the exchange makes the purchase less expensive in domestic currency terms for the importer or more profitable in domestic currency terms for the exporter. In times of stable exchange rates, some companies may choose to ignore seemingly normal fluctuations; however, even in such periods, a minor increase or decrease can significantly impact the value of the transaction.

For example, Canadian exporters, accustomed to a competitive advantage based on the historically lower value of the Canadian dollar against the U.S. dollar, were forced to adapt quickly and dramatically when the two currencies became near-equal value during the global economic crisis of 2008-09. Even exporters that could continue to compete on quality or other factors saw the profitability of their American businesses nearly evaporate. Meanwhile, Canadian tourists and cross-border shoppers (and importers) welcomed the shift.

FX risk also tends to increase the longer the exposure, as more factors can vary and greater uncertainty is introduced into transactions. For example, a payment at sight involves less foreign exchange risk than a payment at 180 days.

Some businesses consider a shift in currency values to be a speculative opportunity. To most, however, the management of significant fluctuations in currency markets more than justifies the cost of obtaining protection. For example, consider a business in which a 10 percent margin is considered profitable; an unfavourable 30 percent shift in exchange rates effectively eliminates the value of a transaction—and perhaps of the entire market for that particular trading relationship.

Such businesses, therefore, seek to manage currency or foreign exchange risk in several ways, the most common of which is the use of forward foreign exchange contracts or options. These financial instruments enable those who use them to lock in an exchange rate for an agreed period of time. This eliminates the uncertainty related to currency fluctuations. There are combinations of techniques that can be structured to cover either eventuality within a range of values. The cost of such strategies, however, is high.

International Trade Finance Tip

When conducting trade finance, it is important to be aware that finance executives must often anticipate the likely direction of a currency to select appropriate exchange rate risk mitigation techniques, or combinations of techniques. While conviction that a foreign currency will appreciate (increase in value) relative to a domestic currency would warrant one solution; an opinion that the currency will depreciate (lose value) would call for an exact opposite strategy.

Country Risk

Civil unrest and revolution or other financial crises in either the importer’s or the exporter’s country, is generally referred to as country risk and will cause economic instability. Country risk is a combination of political and economic risk in the country where the buyer or supplier is located. The two factors are combined because economic hardship and political upheaval are closely related. A country’s political risk is assessed by reviewing:

• The frequency of coups and labour unrest
• The possibility of a war or civil disruption
• Movements toward expropriation and protectionism
• Social and ethnic group conflicts
• The role of the military in the country
• The role of the political opposition

Likewise, the related economic risk factors to consider include:

• The country’s inflation and unemployment rates
• The growth rate of the country’s gross domestic product (GDP)
• The government’s fiscal deficits
• The country’s international reserve position
• Stoppage of foreign payments due to foreign exchange shortages, boycotts, sanctions or international payment moratoriums

Country Risk and National Governance

In its 2016 Global Risks Report, the World Economic Forum reported that failure of a national governance is perceived as the highest risk to doing business by executives in 14 economies: half of them in Latin America, four in Sub-Saharan Africa, two in Eastern Europe and one in Asia . This risk is caused by—or results in—factors such  as  weak  rule  of  law,  corruption,  illicit  trade,  organized crime, impunity and political deadlock.

Businesses are  impacted  in  many  ways,  including  increased  costs from operating in countries affected by poor governance, an unpredictable environment and complying with international standards.  These costs can  be  serious  enough  to  become  unsustainable for companies to maintain long term. In addition, illicit trade can result from poor governance which undermines corporate brands and supply chains.

Bank Risk

Bank risk is defined as the risk that a bank will fail to meet its financial obligations towards the importer or exporter. In other words, it is the possibility that a bank providing a payment promise or a financing commitment under a trade finance instrument will fail to honour its commitment. This type of risk refers to the bank’s financial health and stability, as well as its ability to pay.

Banks play a critical role in international trade by providing trade finance products that reduce the risk of exporting. Banks are important facilitators of international trade.

Besides providing liquidity, banks guarantee payment for around a fifth of world trade. However, it is important to remember that not all banks operate under the same standards. Importers and exporters should assess the risks of engaging in business with a particular bank.

There are other risks that have financial implications in international trade to consider. These include transportation risks, personnel risk, technology risk, intellectual property risk and social risk.  To identify the optimal risk level for a given circumstance, a company must assess mitigation costs against expected returns.

The post Identify and mitigate the 4 types of financial risk: commercial risk, foreign currency risk, country risk, and bank risk appeared first on Trade Ready.