A FIRM focus on the financial risk inherent in foreign trade transactions is
integral to the success of any operation, says Fred Harrison of Marriott Marineserve trade finance division.
In 1996 we were approached by a commodity trader who required political risk cover which was unobtainable in South Africa for various reasons.
We were able to place the risk for him, and that prompted us, as niche market brokers, to investigate the potential of adding these covers to the range
of services we already offered.
The result, says Harrison, was a holistic approach to all aspects of financial risk related to foreign trade.
Various credit enhancement mechanisms, arranged in both local and international markets, were identified and put in place for clients in conjunction with their cargo arrangements.
Growth in this area motivated the appointment of Gavin Thompson, with 27 years experience in the financial risk insurance field, to assist in the field of risk management.
From the severely limited markets available in the 1980s, the market has grown both locally and internationally, says Thompson.
The US market was not available to us until the mid 90s and that particular market is highly innovative with new products being developed all the time.
Marriott's trade finance division keeps up with developments on all fronts to ensure that the solutions to clients' risk management requirements are sourced in the best possible manner, and at the correct premium, says Thompson.
Trade finance risk insurance has developed rapidly, encompassing all forms of protection - contract
frustration, confiscation, expropriation, deprivation, war risk on land and terrorism - to name a few.
While standard bulk packages are available, this type of financial risk management normally requires a customised arrangement to fit the client's requirements, says Thompson, Marriott has, for example, put together packages for major Aid projects that require much extended terms of payment.
Fred Harrison... holistic approach
Gavin Thompson...
customised arrangements
Copyright Now Media (Pty) Ltd
No article may be reproduced without the written permission of the editor
To respond to this article send your email to joyo@nowmedia.co.za
