These multiple exchanges between nations have led to the encounter of several legislations. An intelligible negotiation would be almost impossible without understanding the meaning that the actors give to their activities and grasp their perceptions. However, it is true that negotiation is a crucial step in the smooth running of an import-export operation because it allows to set the bases and the safeguards that will guide the operation from start to finish and which will be the determinants of success or failure.
Recall that an import-export operation contains two facets which are linked to each other. The first relates to the needs of the actors (sale or purchase), the second in turn relates to compliance with standards (procedure, legislation, etc.). A successful foreign exchange transaction is one that meets the needs of the buyer or seller on the one hand and national and international standards on the other hand. Taking into account what has just been said, international trade negotiations should take into account not only the needs of the parties, but also the legislative requirements of the countries..
In international trade, negotiations generally relate to the following elements :
Prices ;
The quantity ;
The quality ;
Mode and cost of transportation ;
Payment methods ;
Deadlines ;
The choice of the Incoterm.
Each of these elements produces a direct impact on the two facets of an import-export operation, negotiations must therefore be done with the aim that the impacts produced are as positive as possible for the parties, i.e. negotiations must lead to the satisfaction of the parties either in terms of sale or purchase, but also to compliance with regulatory requirements related to said operations of the countries to which the parties relate.
Take the case of an importer or exporter resident in the Democratic Republic of Congo. Before continuing with our example, it is important to underline that the import-export activity in the DRC is regulated by the Central Bank of Congo (BCC) on the one hand by its Exchange Regulation of 2014 which sets the rules and procedures to be observed, as well as the various instructions in the matter, and on the other hand by its Tariffs and Conditions of operations published each year, which lists the different types of sanctions in the event of violation of the Exchange Regulations. Negotiations at the time of concluding either the sale when it is an export operation, or the purchase when it is an import operation, must take into account adequate delivery times, adequate payment terms in relation to delivery times, suitable payment terms, appropriate Incoterms, etc.. All of these choices involve subtleties which should be taken into account in order to stay in line with the regulatory requirements of the BCC.. Let's just take the case of payment methods and their influence on delivery times. These must logically vary depending on whether it is a payment before embarkation, embarkation, on arrival or an ordinary payment. And this variation is due to the change in the deadlines required for the closing of the exchange declaration according to each method of payment..
The choices must be made carefully so that the operation opposite is done in the straight line of the regulatory prescriptions of the Central Bank of Congo to avoid exposure to the risks of the sanctions provided for in the Tariffs and Conditions of the operations, while satisfying the expectations of the exporter or importer. Hence the importance and the need for companies involved in import-export to acquire the technical skills and regulatory knowledge in this area to properly conduct the negotiations which are the premises of import-export operations.. So, as logic dictates, if the premises are good, the conclusion will also be good. That said, we say that if negotiations with suppliers or customers, as the case may be, are carried out with the aim of responding to the two facets mentioned above, that is to say in order to respond to the expectations of the individual and the State at the same time, the closure of said operations will be done in peace, thus avoiding exposure to any type of sanctions in the matter.
15 Comments
It’s indeed very important to be cognizant of country regulations in order to get into a suitable agreement in a trade deal. Otherwise we create an unnecessary exposure that can lead to huge fines, especially in some countries where ExCon is very complex…
Kudos @Akili for the in-depth knowledge in managing import/export in DRC.
Thank you Patient
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