FFFAI hosts webinar on payment risks in export transactions & role of ECGC
The Federation of Freight Forwarders Associations in India (FFFAI) hosted an insightful webinar on “Payment Risks in Export Transactions and Role of ECGC” for its members on April 29, 2022.
The webinar was focused on the following aspects: 1. Common payment terms in export transactions; 2. Commercial & political risks associated with these payments; 3. Information on ECGC services; 4. Loss minimisation steps to be taken in case of default; 5. Claim documentation; and 6. Insurance coverage on cargo and freight on cargo being re-imported.
Moderated by Mr R. Rajesh Kumar from FFFAI, the webinar was addressed by Mr Shankar Shinde, Chairman, FFFAI and other speakers/panelists from ECGC, which is wholly owned by the Government of India.
Welcoming the panelists from ECGC and FFFAI members/participants, Mr Shinde highlighted the important role being played by ECGC. “The perception about ECGC that it is only for the importers or exporters and not for the logistics service providers is completely wrong. The perception needs to be changed. We need to educate our clients, i.e. exporters and importers, about the importance of being part of ECGC for resolving any issues pertaining to financial transaction/payment etc. to secure their as well as freight forwarders’/Customs brokers’/logistics service providers’ interests,” emphasised the FFFAI Chairman.
Speaking on the occasion, Mr Anand Singh, GM and CMO, ECGC, acknowledged the immense contribution of FFFAI members in achieving the $400 billion export target last year. According to him, growth of export and realisation of payment are equally important. ECGC covers these aspects and is making the payment cycle flawless to protect bankers and the trade. For this, insurance coverage is in place through ECGC. He, however, pointed out that for smooth payment realisation under ECGC coverage, written contract is a must, between buyers and sellers or bankers and borrowers.
In his presentation, Mr Saket Kumar elaborated on the role and activities of ECGC and the major issues related to payment in different areas like default of banks, discrepancies, political issues, non-acceptance, insolvency, etc. According to him, ECGC’s insurance coverage takes care of all these aspects. Mr Kumar also elaborated on other remedial measures from ECGC against payment issues, including services offered by dept. collection agencies and legal actions.
The beneficial webinar also saw some very interesting observations and questions put forward by FFFAI member participants from 28 Member Associations spread across the country. Many of the questions were related to risk factors due to lack of appropriate documentary evidences. Mr Anand Singh made it clear that ECGC takes care of this as per the available documents and IE Code (Importers and Exporters Code).
Mr Shankar Shinde observed that to resolve issues related to the documentation part of transactions, there was need for detailed case-to-case analysis supported by adequate write-ups; FFFAI and ECGC would then take it forward.
The webinar concluded with the vote of thanks by Mr Vinod Sharma, Honorary Secretary, FFFAI to all office-bearers of the Federation, panelists and participants for attending this important discussion on payment issues, which is vital for the survival of freight Customs brokers and freight forwarders in particular. He welcomed the initiatives of ECGC to mitigate the payment issues and requested more interactions on the subject in future, as per a release.
Source: Exim News Service: Mumbai, May 18