Understanding International Risk

2

Risk Management Identify risk

Commercial risk Foreign exchange risk Country risk Other considerations

Determining exposure tolerance

Understand options available to mitigate risk

3

Commercial RiskR

ISK

OF

NO

N P

AY

ME

NT

RISK

OF N

ON

DE

LIV

ER

Y

OPEN OPEN ACCOUNTACCOUNT

DOCUMENTARY DOCUMENTARY COLLECTIONCOLLECTION

LETTER OF CREDITLETTER OF CREDIT

CASH IN ADVANCECASH IN ADVANCE

EXPORTER RISK

IMPORTER RISK

HIGH LOW

4

Foreign Exchange Risk Transaction

Translation

Economic

5

Country Risk

Political/Sovereign

Convertibility

Transfer

6

Other Considerations

Regulatory

Cultural

7

Exposure Tolerance Identify

Clearly define internal risk tolerances

Implement Devise formal risk management policy

Adjust Revisit on annual basis

8

Risk Mitigation Tools Commercial Risks

Letter of Credit Letter of Credit Confirmation Documentary Collection

FX Risk Hedging: forwards, options

Political (Sovereign Risk) EXIM Insurance

Credit Risk EXIM Working Capital Guarantee Program EXIM Medium-term Insurance EXIM MTDA

Citi’s Trade Network

North America- Canada- Mexico- United States

Central & Eastern EuropeCzech Republic- Hungary- Kazakhstan- Poland- Romania- Russia- Slovakia- Turkey- Ukraine

Asia Pacific- Australia- Brunei- China- Guam- Hong Kong- Indonesia- Japan- Korea- Malaysia- New Zealand- Philippines- Singapore- Taiwan- Thailand- Vietnam

San Francisco, USA Toronto, Canada

Glendale, USA Tampa, USA

Dublin, Ireland

Penang, Malaysia

Mumbai, India

Montreal, CanadaCalgary, Canada

Processing Centers / Presentation Windows

Office Locations

7

Indian Sub-continent- Bangladesh- India- Pakistan- Sri Lanka