Factoring Companies Guidebook

With certain countries there are restrictions on the amount of particular products that they allow to be imported or exported.

See also: - "Licenses" "Certificates of Conformity", "Certificates of Origin"

Concerns

The potential problem for us is that we may fund debts for goods which have been exported, but for which they do not have a quota. In these circumstances the debt will not be collectable.

Examples of this are as follows:

A UK company must apply for a quota to export textiles and toys to the Far East - while there is the free movement of goods within the European Union, there are import quotas with EU countries importing from Hong Kong.

Quotas also do not only apply where the client is exporting finished products from the UK, as the importing country's restrictions /quotas may also apply to the country of origin of the component parts or indeed the final product itself if it was sold on its original form.

The USA restricts the export of certain technologies to particular countries. While they may allow the export of some electronics to the UK, they prohibit their re-export from the UK to certain other countries.

Of further potential concern are goods supplied to export specification which may prove difficult to dispose of elsewhere, particularly in a collect-out situation e.g. electrical goods manufactured to other countries' specifications, cans of food labeled in Arabic.

Identification

Determine from the Client the type of goods in which they are dealing, their country of origin, country of destination and volumes to and from these countries.

It is also essential to determine the movement of the goods i.e. whether they are delivered to the Client in the UK or shipped direct from the country of origin to the customer.