I. What consequences can poor credit of an agent lead to?

In 2021, a Ningbo-basedforeign tradecompany, due to the sudden cessation of business by its agent, resulted in $600,000 worth of goods being stranded at customs, exposingcredit risk prevention and controls importance. Main risks include:

• Capital Chain Rupture Risk: Agent misappropriates client prepayments
• Performance Capability Risk: Sudden cessation of customs declaration services
• Affiliated Enterprise Risk: Subsidiary/affiliated company debt involvement

Countermeasures: Establish a system by checking customs AEO certification, China Export & Credit Insurance Corporation (SINOSURE) credit reports, bank statement verification, etc.three-tier credit review system, and it is recommended to keep 2-3 alternative agents simultaneously.

II. How much loss can document compliance issues cause?

The new CBAM carbon tariff mechanism implemented by the EU in 2025 has led toRecord - filing of Foreign Trade Operatorssoaring costs due to documentation errors. Common risks:

• Customs duty recovery due to incorrect HS code classification
  • Case: A certain mechanical part was subject to a 35% anti-dumping duty due to an incorrect 6-digit tariff code.
• It is recommended to verify through the following methods:Missing certificates leading to invalidation of preferential tax rates
• Omissions in dangerous goods declarations triggering maritime penalties

Customs registration certificatedual-person review mechanism proof, and clearly define the proportion of liability for document errors in the contract.

III. What hidden risks exist in the logistics process?

According to the 2025 report by the International Federation of Freight Forwarders Associations (FIATA),Operational risksthe cargo damage rate increased by 12% year-on-year, with key areas of concern being:

• Booking errors causing vessel schedule delays
  • Confirmation of space during peak season requires written proof from the shipping company
• Missing temperature records for temperature-controlled containers
• Cargo loss due to sorting errors at transshipment ports

Practical advice: Require agents to purchaseall-risk transit liability insurance, and state on the bill of lading ”container temperature recorder data as basis for claims”.

IV. What financial risks are hidden in payment terms?

During the period of drastic USD exchange rate fluctuations in 2024, a certain enterprise suffered losses due to the agentsexchange rate locking error, losing $82,000, which highlights key points for payment risk control:

• Long - termFX Settlement AgencyExchange rate quotation discrepancies
• L/CBlind spots in identifying soft clauses
• Compliance of cross-border RMB settlement channels

Solution: Agree to useChina Foreign Exchange Trade System (CFETS) Announces Exchange RatesAs a benchmark, agents are required to provide original SWIFT message records.

V. How to Mitigate Legal Risks Through Contract Clauses?

During the 2018 China-US trade war, a certain agency contract due tomissing force majeure clauseled to a $2 million dispute, highlighting the importance of legal clauses:

• Specify the applicable version of trade terms (suggested INCOTERMS 2025)
• Agree on data sovereignty and privacy protection standards
• Set a cap on joint and several liability for intellectual property infringement

Professional Advice: Stipulate in the dispute resolution clauseShanghai International Arbitration Centerjurisdiction, and clearly state the application of the United Nations Convention on Contracts for the International Sale of Goods (CISG).