Thai Nguyen University International school In depth interview questionnaire I/ Information Interviewer Nguyen Thi Nguyet Minh – Class IBK8 Interviewee Darren Lindsay Kerr Date of birth 1965 Sex Male[.]
Thai Nguyen University International school In-depth interview questionnaire I/ Information: Interviewer: Nguyen Thi Nguyet Minh – Class: IBK8 Interviewee: Darren Lindsay Kerr Date of birth: 1965 Sex: Male Academic standard: Position: Supply Chain Management Interview topic: Risks in international payments Location: At Nui Phao Mining Company Time: 1/11/2022 II/ Content: What you think about risks in international payments? Have you ever felt that you are at risk in any international payment? If so, talk about that risk Our biggest risk is currency rate fluctuations This volatility has a huge impact on the company's finances But this problem is also the most difficult for us to overcome There is also a form of direct money transfer, if the supplier does not return the goods or loses the goods during transportation, we bear the cost of the risk of losing the goods, or the goods are of poor quality, we have to deal with them deal with the supplier Because we paid, it took a long time 2 Which currency should you choose to avoid currency risks in the current exchange rate fluctuations? Why? Any currency swings in the current exchange rate variations, but only the most common foreign currency is USD This coin may cross all borders Paying in RUP or CNY is currently extremely simple to be withheld since the country employing this currency is embargoed in various countries What you think about the payment methods (Letter of Credit, Remittance, Documents against Payment)? Based on your position, how does this method affect credit risk in international payments? What are the risks of using this method? The L/C payment method is very good for our side because this form ensures that the certification documents must be fully approved by the Bank's censorship and at the same time the goods must be delivered to our side before we can accept the payment maths But for this form, there is only risk of exchange rate and interest rate If the exchange rate is stable and the interest rate is also stable, it is favorable for us to borrow And now that the exchange rate is fluctuating strongly, in this L/C payment, we both have to bear the increased interest rate and also bear the exchange rate difference between the real world and the bank It is recommended to use this payment also from time to time Besides, I have used the method of transferring money directly to the supplier's account This payment method is used more because it is faster at checkout But it also has risks Because some suppliers often want me to pay 100% of the goods But when shipping the goods, it is very long or not enough This slows down the working progress of the factories in the company At NPMC, have you met or know someone who meets and handles country risk in international payments? You can say clearly Due to Russia's present political troubles, several European nations and the US not accept payment in rubles, and the US has an embargo on China, thus the CNY is also not accepted for payment by some countries And if transfers to Russia are made through intermediary banks in the United States or Europe, there is a danger of being embargoed and retaining money in those intermediary banks Because of the embargo, this is also a national risk I haven't experienced any nation dangers at NPMC since when I transferred something, I received warnings saying that the bank was embargoed and I couldn't send it, and I had a remedy in that I didn't transfer to the prohibited bank that fortune And ask the supplier to use another bank without the US embargo, then I will transfer the money Regarding legal issues when making payment, what are the risks in your opinion? While processing foreign payments, the largest legal risk is advance payment and direct payment to suppliers because when there is an invoice, the products have not arrived at the firm or have not passed through the port The danger is that I have already paid yet the supplier, for example, quits functioning or fails to deliver the items on time Alternatively, the commodities are on their way to the sea when they are lost Then I'll have to go to court to get my money back or find the products Our organization has a legal section in this regard So this risk will also be solved but quite time consuming There are a few times we have completely lost money because that supplier stopped working and the legal party could not handle it, so it significantly affected the company's finances Of the four risks mentioned above, which one you think leads to the greatest financial impact? Please arrange the risks based on the criteria of financial impact in order from large to small For me, out of the four types of risks mentioned above, in my opinion, currency risk has the biggest financial impact Order of influence: currency risk - documentary credit risk - country risk - regulatory risk Can you give some solutions of your own to help the company reduce the above risks? At NPMC, the problem of currency risk is that only some very necessary items will accept payment at a high exchange rate For example, the last time was the right month to "Shut Down" the factory, but right at the time when the exchange rate was fluctuating strongly, we still accepted to pay the supplier with a high price to keep up with the "Shut Down" schedule of the factory factory I am a supply chain manager myself, who directly find suppliers and fix prices Although it was agreed to close the best prices, because the exchange rate was too high, it still affected the company's finances Regarding the risk of document payment or direct money transfer payment, I am also responsible for this Because I'm the one who checks whether or not the supplier is reliable I've just had the problem of undocumented payments, but usually the supplier doesn't have enough documentation so the company hasn't paid Some times, half of the goods are received and half of the suppliers wait for the payment documents and the company pays the suppliers to complete the delivery, which also leads to the delay of the factory In order for this risk not to happen, we usually check the documents very carefully Check with the paying bank Investigating whether the supplier is reliable or not, the company already has a staff to this In order to avoid meeting with a fraudulent company that will lose the budget and affect the company's finances In addition to investigating that company, we ask a 3rd party to make payment and then the company will pay that 3rd party Usually the third party that stands out will be the bank the company trusts, which is "Techcombank" Carefully read the policies of the units that are obliged to provide or receive goods and services before paying to avoid unnecessary loss risks Retain all transaction details and related documents according to each payment method for later tracking Country risk is related to political changes, economic changes, foreign exchange management policies - foreign trade of a country At this risk, pay attention to sanctions to avoid withholding money at embargoed banks Although the money will be returned, it will have to wait until the embargo expires In general, I find that in order to avoid the above risks, it is necessary to thoroughly research the supplier including financial capacity, history of production and business activities, import and export field as well as consult the bank about the process The partner's business process is important to limit risk