In accordance with the Convention on International Factoring, adopted in 1988 by the International Institute for the Unification of Private Law, a transaction is considered factoring if it satisfies at least two of the four criteria: 1) availability of credit in the form of prepayment of debt claims; 2) maintaining accounting supplier, primarily accounting for implementation; 3) collection of his debts; 4) supplier insurance against credit risk. At the same time, in a number of countries, accounting for invoices is still referred to as factoring - an operation that satisfies only one, the first of the indicated signs.
When exporting products, the exporter's credit risk increases significantly (due to difficulties in assessing the creditworthiness of potential foreign customers; providing commercial credit for a longer period, taking into account the time required to deliver goods to foreign markets; and also due to factors such as political instability in the country importer, low level of economic development etc.). In addition, since an agreement on foreign trade factoring may provide for the use of two or more currencies, there is also a currency risk - the danger of currency losses due to a change in the exchange rate of a foreign currency relative to the national one. Due to the increase in the degree of risk, the factor imposes more stringent requirements on the exporter than on suppliers in the domestic market. When servicing the exporter, the factor, as a rule, concludes an agreement with the factor of the importing country and transfers to it a part of the scope of work. Thus, the participants of international factoring transactions are:
- - supplier, buyer;
- - import factor (bank or import factor firm) and export factor (bank or export factor firm).
V commercial bank international factoring operations (IFI) is conducted by a special factoring unit (FP). To ensure effective interaction between both import factors, suppliers and buyers, the work of the FI should be based on a rational technology that takes into account the rules of behavior of the import factor and the export factor in the environment of networks of international factoring associations and all possible scenarios for the behavior of the FI.
Recently, many large Russian banks have become interested in international factoring operations that promise large incomes. Of particular importance is factoring in international trade transactions in the light of the "Instructions on the procedure for exercising currency control over the validity of payments in foreign currency for imported goods, which entered into force on January 1, 1996.
There are four factoring models used in international trade:
- - two-factor;
- - direct import;
- - direct export;
- - "back-to-back" (back-to-back).
The two-factor model makes it possible to separate functions and risks between an import factor located in the country of the importer and an export factor located in the country of the exporter. The main goal of this model is to provide financing up to 100% and reduce overhead costs in the administrative area.
The classic two-factor scheme consists of the following steps:
- 3. financing;
- 4. payment.
At the first stage, the exporter asks his export factor for the amount to be secured. The export factor requests the required limit from the import factor. The import factor verifies the importer and provides guarantees to the export factor. Further, the export factor gives the exporter permission for the limit, after which the sale of documents is carried out.
In the second step, the exporter delivers the good or service and sends a copy of the invoice to the export factor, who sends it to the import factor. Simultaneously with the goods, the exporter sends the importer an invoice with assignment notes.
At the third stage, after the delivery of a good or service, the export factor finances the exporter within 70-90% of the total original invoice price.
At the fourth stage, the importer makes a 100% payment to the import factor, and the latter transfers the amount received to the export factor. Finally, the export factor transfers the unfinanced part of the claims (10%--30%) to the exporter minus the cost of factoring services.
If the payment deadlines are not met, the import factor sends warning reminders to the importer. If, after two or three reminders, the claims are not paid, the import factor takes the necessary legal measures.
The import factor assumes the risks of the importer, checks its solvency and guarantees the export factor payment for the goods supplied by the exporter. If the importer does not pay for the goods, the import factor pays for them.
The export factor assumes the risks associated with the delivery of goods by the exporter and, if necessary, credits the exporter without waiting for payment from the importer or import factor.
The advantage of two-factor factoring is that for the company servicing the importer, the debt requirements are internal, and not external, as for the factor of the exporter. However, it is quite cumbersome and involves high costs for the parties.
The second model of international factoring is direct import factoring.
Its main purpose is to secure payments. The scheme of direct import factoring consists of the following stages:
- 1. limit request / risk provision;
- 2. delivery / distribution of the invoice;
- 3. payment.
Direct import factoring only makes sense if the export is to one or two countries. If the exporter has counterparties in many countries, then the conclusion of one agreement with the factor of his country will be more convenient than a large number of direct agreements with the factors of other states.
In the case of direct import factoring, the factor - the firm of the importing country - enters into an agreement with the exporter on the assignment of debt claims for this country to it, carrying out credit risk insurance, accounting and collection of claims that are internal to the factor. At the same time, lending to a foreign exporter in a foreign currency for the factor is quite difficult, and the prepayment condition is extremely rare in such agreements.
Thus, direct import factoring may be of interest to firms that do not need immediate financing for assigned claims.
The third model of international factoring operations is direct export factoring. With direct export factoring, it is not required to connect a factor in the country of the importer. The main stages of direct export factoring are as follows:
- 1. limit request/risk provision;
- 2. delivery/delivery of the invoice;
- 3. financing;
- 4. payment.
At the same time, the factor faces significant difficulties in assessing the creditworthiness of foreign clients and collecting claims.
To assess the risk or for reinsurance, the export factor can connect a credit insurance company in the country of the importer or insure itself with guarantees of the appropriate state organization. When using this factoring option, you can get favorable conditions for financing export deliveries with coverage from the state insurance company.
In the first three models of international factoring operations, financing of the claims of concerns is not provided. This function is performed by back-to-back factoring. The implementation of the transaction with this technology is similar to a combination of a two-factor scheme and conventional internal factoring.
A feature of foreign trade factoring in general is its always open nature, as well as the absence of the right of recourse to the export supplier. The latter is due to the fact that the basis of factoring services for the exporter is usually the protection of the exporter from credit risk. Servicing of the entire trade turnover, which is provided for in transactions within the country, is much less common in factoring servicing of foreign trade operations; in most cases, factors specialize in servicing the market of one country or the market for certain products.
International factoring allows the importer to receive goods on a permanent basis with a deferred payment (usually up to three months). The obligation of payment rests with the importer after acceptance of the goods delivery in terms of quality and quantity. Factoring opens up unique opportunities for enterprises that import goods to Russia, being nothing more than a trade credit.
Upon obtaining the international status of a "factor", a Russian bank becomes a guarantor of the security and reliability of business for foreign factor firms, assuming the obligation to pay a foreign company for goods shipped to Russia. When importing goods and services to Russia, the factoring transaction is carried out in several stages.
At the first stage, the Russian importer and foreign exporter agree on the terms of factoring and conclude a contract.
At the second stage, the foreign exporter, having received from the export factor the confirmation of the factor bank on the reliability of the Russian importer, ships the goods or provides services.
At the third stage, the foreign exporter assigns the accounts to the factor firm. If a foreign exporter needs to replenish working capital, then at the fourth stage, the factor firm pays the exporter in advance the cost of goods or services provided.
At the fifth stage, the Russian importer pays the cost of the goods or services rendered upon maturity.
At the sixth stage, the Russian factor-bank, after receiving funds from the importer, pays the foreign factor-firm (and in case of non-payment by the importer at the due date of payment, it pays from its own funds). The main factoring clients are Russian importers who are forced to make prepayments, open a letter of credit or provide payment guarantees for the delivered goods or services. For such importers, factoring is a way to avoid expensive loans and increase the efficiency of using their own.
Factoring is beneficial for both the supplier, the buyer and the factor. With its help, the supplier can: increase sales, the number of buyers and competitiveness by providing buyers with preferential terms of payment for goods (delay) under a reliable guarantee; get a loan in the amount of up to 90% of the value of the delivered goods, which will speed up the turnover of funds.
The buyer can:
- - get a commodity credit (the seller delivers the goods with a deferred payment
- - under guarantee up to 3 months on average);
- - avoid the risk of receiving low-quality goods;
- - increase the volume of purchases;
- - improve competitiveness, accelerate the turnover of funds.
The main income of the factor are:
- - interest on the loan;
- - service charge.
Commercial banks, developing factoring operations, supplement them with elements of accounting, information, advertising, marketing, legal, insurance and other customer services. This allows you to expand the range of bank customers, strengthen communication with them, increase the bank's profits by expanding operations.
Thus, we can highlight the main economic advantages of factoring:
- - increase in liquidity, profitability and profit;
- - converting receivables into cash;
- - the opportunity to receive a discount for the immediate payment of all supplier invoices;
- - independence and freedom from observance of terms of payments from debtors;
- - the possibility of expanding the volume of turnover;
- - increase in profitability;
- - Saving own capital;
- - Improved financial planning.
The experience of foreign countries and a number of advantages of export factoring in comparison with other forms of payment in international trade make it possible to predict the growth of its popularity among Russian exporters. This is due, firstly, to the fact that export factoring is carried out by factors with a variety of citizenships, which are part of a particular association of factoring companies. Secondly, the supplier firm, having received most the amount for the delivered goods, immediately after shipment, can send it into circulation. Thirdly, the factor will notify the exporter of the financial position of the potential buyer. Thus, the exporting enterprise gets the opportunity, without the risk of wasting time and money, to expand production for a specific importer of a particular type of product. Since factoring significantly helps to collect payments on obligations commercial activities, it is especially relevant in the context of large receivables, paralyzing the system of non-cash payments in our country.
Make a calculation of the lease payment schedule according to the form below (Table 1), if the following data are available:
Table 1.
The date of the first payment is January 20, 2001. Take into account the fact that leasing payments in terms of investment costs of the lessor are written off in equal shares as a percentage of the contract value of the leasing object, and its amount is determined by the following formula:
where A (%) - depreciation of the leasing object for the period of the contract,%; K is the number of lease payments.
The income of the lessor is determined as follows:
where Pd - lease payment in terms of income; OD - the cost of the main debt, which is monthly reduced by the amount of accrued depreciation; LS% - lease rate, %, D - number of days in a month.
We have depreciation of the object for the period of the contract A (%) = 75%, and at the same time the number of lease payments is K = 10. This means that leasing payments in terms of investment costs of the lessor are written off in equal shares in the amount of 75/10=7.5% of the contract value of the leasing object.
We summarize the calculations in table 2.
table 2
|
The cost of the principal debt, rub. (OD) |
Leasing payments |
|||||
|
payment date |
In terms of investment costs of the lessor |
Landlord's income |
group 5= group 3+group 4 |
|||
64. International factoring
The contract of international factoring (financing against the assignment of a claim) is of a specific nature. The law applicable to the financing agreement is determined in accordance with paragraphs. 9 p. 3 art. 1211 of the Civil Code of the Russian Federation in the absence of an agreement between the parties the law of the financial agent's country.
Ottawa Convention on International Factoring Operations dated 05/26/1988.
"Factoring contract"- a contract entered into between one party (the supplier) and another party (the factoring firm, hereinafter referred to as the assignee), according to which the supplier may or must assign to the assignee liability claims arising from contracts for the sale of goods concluded between the supplier and its customers (debtors), with the exception of those related to goods purchased mainly for their personal use, family or household. Wherein the assignee must assume at least two of the following responsibilities:
supplier financing, such as a loan or advance payment;
maintenance of accounts for liabilities;
presentation for payment of receivables;
protection against insolvency of debtors.
The assignment of receivables must be communicated to the debtors, but the convention does not make the validity of the assignment dependent on the consent of the debtors. There is a provision on the priority of the factoring agreement (Article 6) " Assignment of a liability claim by a supplier to an assignee may be made notwithstanding any agreement between the supplier and the debtor prohibiting such an assignment". True, upon accession to the Convention, the state may make a reservation on the non-application of this rule if the debtor has a commercial enterprise in its territory (Article 18).
Rights and obligations of the parties:
The debtor, having received a written notice from the supplier or the assignee by virtue of the authority issued by the supplier, is obliged to pay the assignee, unless he knows of another preferential right to receive this payment; if the notice clearly identifies the claim and the assignee; the notification relates to claims arising from a supply contract concluded before or at the time of sending the notification.
In the event that the assignee draws up against him a claim for payment, a monetary claim arising from a contract for the sale of goods, the debtor may use against the assignee all the remedies arising from the contract that he could use against the supplier. However, if the debtor has made a payment to the assignee and the supplier has not delivered the goods to him or has delivered the goods in breach, then he may NOT demand a refund of the payment from the assignee. From this rule is two exceptions. The debtor has the right to demand from the assignee the return of the amount paid if:
the assignee failed to pay the relevant amount to the supplier;
the assignee paid the receivable to the supplier when he knew that the supplier had defaulted on his obligations to the debtor.
The convention applies if all parties to factoring operations have commercial enterprises on the territory of different contracting states or if the contractual relationship is governed by the law of a contracting state. Parties may exclude the application of the Convention entirely. The exclusion of certain provisions of the Convention or their change is not provided.
Factoring- a financial commission transaction for the assignment of accounts receivable to a factoring company in order to:
immediate receipt of most of the payment;
guarantees of full repayment of debts;
reducing the cost of maintaining accounts.
Factoring- a set of services that a bank (or a factoring company), acting as a financial agent, provides companies that work with their customers on a deferred payment basis. Factoring services include not only providing the supplier and receiving funds from the buyer, but also monitoring the state of the buyer's debt for supplies, reminding debtors of the due date of payment, reconciliation with debtors, providing the supplier with information about the current state of receivables, as well as maintaining analytics on history and current operations.
Term "factoring" comes from the Latin facre - to act, to perform ( English f astoripg). Some scientists believe that it arose only in the 30s of our century in USA, others argue that factoring is a phenomenon that appeared in middle Ages by changing the English institution of commercial intermediation, in trade between Britain and colonies.
The main document regulating financing against the assignment of a monetary claim at the international level is Convention "About international factoring", accepted UNIDROIT(International Institute for the Unification of Private Law), in 1988 . The Russian Federation is not currently a member. V Russia factoring appeared only in March 1996 when Part Two was adopted Civil Code.
Article 824 of the Civil Code of the Russian Federation provides the following definition: under a factoring agreement, one party (financial agent) transfers or undertakes to transfer funds to the other party (client) on account of the client's (creditor's) monetary claim against a third party (debtor), and the client assigns or undertakes to assign this monetary claim to the financial agent. The monetary claim against the debtor may be assigned by the client to the financial agent also in order to ensure the fulfillment of the client's obligations to the financial agent.
In other words, the actual debts (cash claims) can be sold creditor to a certain person with free cash (financial agent), who undertakes to pay the client (creditor) the debt of a third party due to him, minus his own interests and commissions. And when the payment deadline for the specified amounts comes, the financial agent will recover them from the debtor.
The law distinguishes between two types of monetary claims that can be the subject of an assignment: payment term, which has already occurred, that is, a real debt, and payment obligations that are not yet due (future claims).
Factoring has many advantages, the most important advantage is that the supplier, who shipped the products to the buyer, can immediately receive payment for the shipped goods from the financial agent, without waiting for the payment deadline with the buyer. That is, the purpose of factoring is to get the client Money in exchange for the right of claim assigned to a third party, in addition, the factoring agreement may have a security character.
Factoring helps to meet the needs of the enterprise in current working capital, without forming an excess money supply. In addition, it opens up an additional opportunity in dealing with the debt of small and medium-sized enterprises. A significant advantage of factoring is that factor companies provide a constant and thorough record of the state of affairs of their clients and in every possible way prevent the occurrence of monetary debts.
The main advantages for each subject of factoring relations:
The supplier who shipped products to the consumer, can immediately receive payment from the factor (financial agent) for the shipped goods, without waiting for the settlement period with the buyer, which prevents long cash gaps, allows you to increase sales and competitiveness, providing buyers with preferential terms (deferment) of payment for goods under a strong guarantee. The use of factoring allows you to get a loan up to 80-90% of the value of the goods supplied;
Customer receives a commodity credit (the seller delivers the goods with a deferred payment under guarantees, on average, up to 3 months); increases the volume of purchases; minimizes the risk of receiving low-quality goods and accelerates the turnover of funds;
Banks, others credit organizations and specialized organizations that redeem monetary claims (financial agents), expand the range of services provided with the help of factoring, achieve additional income. Thus, the financial agent receives not only income from the loan, a commission for early financing, but also a commission for the provision of other financial services as part of factoring services.
factor-company name a company that is closely related to the bank or is its subsidiary; the object of its activity is factoring. Its commission ranges from 2 to 8% of the value of the delivered goods. There is an international association of factor companies. In world practice, special factor companies, as a rule, offer their clients a full range of factoring services - from accounting and control over payments and deliveries to direct financing of deliveries. At the same time, the factoring agreement is autonomous, independent of the purchase and sale agreement.
International factoring is used in export trade ; it simplifies the receipt of cash in the course of the exporter's business operations, which is important, because export deliveries are financed, often on a non-recourse basis, in which case factoring protects against bad debts. The main types of factoring include direct and indirect.
With direct factoring there is one factoring company - for export in the country of the importer-seller, with which the exporter has a factoring agreement. In accordance with the direct factoring agreement on the assignment of the right to claim the purchase price, the factor enters into direct relations with the foreign buyer. The supplier (exporter) assigns the right of claim to the assignee, and he directly enters into relations with the debtor (importer under the contract of sale).
Indirect factoring involves two factor companies: an export factor and an import factor (in the country of the importer-buyer). In the case of indirect factoring, the foreign buyer pays the value of his exported products to the import factor in his country, which transfers this payment to the export factor, and the latter provides the agreed amount to the exporter. The assignee transfers the right of claim to another factor located in the country of the importer, and this second assignee enters into relations with the debtor and transfers the payment received to the first assignee. The advantage of indirect factoring is that that each of the factors has a contractual relationship with a domestic client whose creditworthiness (creditworthiness) is known to the factor.
Generally, there are two main forms of factoring:
Disclosed– in open factoring operations, payment is received through the factor that has an agreement with the exporter, according to which the factor undertakes to purchase confirmed short-term debts of foreign buyers. In other words, the exporter cedes to the factor the right to demand payment for the exported goods. The buyer pays the purchase price not to the exporter, but to the factor; in this case, outstanding debts payable are acquired by the factor with the right to regressive claims.
Undisclosed– if the factoring arrangements are not disclosed to the foreign buyer; its most common form: discounting invoices or repurchasing invoices at a discount.
If the exporter wishes, the factor can finance the transaction in addition to the purchase price services. In this case, he immediately pays the exporter up to 80% of the book value of the confirmed accounts and at the same time provides credit to the foreign buyer. In practical factoring, there is a problem of linking the Ottawa Convention on Factoring and the Vienna Convention on Sales Contracts.
International Factors Group (IFG)- the first international factoring association, which began its activities in 1960. The activity of the association is focused on organizing international factoring operations for various companies around the world. unites 89 members from over 55 countries of the world. Currently, IFG is entering the process of transformation into a global trade association, including the development of the Eastern European and Asian directions of its activities, attracting partners and sponsors to work.
Factors Chain International (FCI) - global network, bringing together 216 factoring companies from 62 countries, designed to promote growth international trade through the development of factoring. The largest Factoring Association in the world in terms of the number of members.
Eastern European Factoring Association was established in 2001 in order to stimulate the development of factoring in the region and ensure the interests of Eastern European factoring companies.
The share of international factoring in the volume of factoring services in Russia today does not even reach 1%. For its development, changes in currency and tax legislation are needed.
The demand for export and import factoring in Russia is determined by the position of our country in international trade, which is unlikely to change in the foreseeable future. Since Russia mainly acts as a raw materials donor, then mainly raw materials - metal, timber, oil - fall under export factoring. Consumer goods are supplied through import factoring - this is the sector that is intended to serve primarily international factoring.
"In general, export factoring in Russia is of interest to enterprises in the raw materials sector, enterprises of the metallurgical, chemical and timber industries," says Victoria Mitrofanova, head of the international factoring department at UniCredit Bank. "Unfortunately, export factoring is in little demand due to the peculiarities of Russian currency legislation."
"Most often, wholesalers and manufacturers operating in sectors such as construction and Decoration Materials, furniture, auto parts, electrical equipment, computers, food, alcoholic beverages, food products, pharmaceuticals, - adds Oksana Nekhvorosnaya, head of the development and customer support department of FactorRus LLC. “Because companies of this profile are especially beneficial to increase working capital and, in addition, most of them have a specific asset structure, the main share of which is receivables and inventory balances.”
The main task of factoring is to increase the turnover of funds between counterparties by obtaining financing, as well as guaranteeing the factor from the risk of non-payment. "Exporters can reduce the risk of non-payment by their buyers by using a two-factor export factoring scheme," says Victoria Mitrofanova. alternative to letters of credit and guarantees.
In addition, importers, having received a factoring limit, have the opportunity to significantly improve the current terms of deliveries from exporters. “In general, factoring contributes to the growth of international trade, makes relations between counterparties more open and trusting, allows companies to enter the markets of other countries and develop trade with new partners in these countries,” sums up Dmitry Malov, Head of Factoring at Credit Europe Bank.
MARKET FOR TWO
In practice, only a few market participants, having accumulated experience, actively carry out international factoring operations. Other companies are just getting started in this area. In particular, this is due to the need to develop special technological platforms and regulatory framework. Also, to work on international factoring, it is important to have enough developed infrastructure, says Corneliu Robu, Deputy Chairman of the Board of the National Factoring Company (NFC). "How is it possible to provide import factoring services, of which 85% of transactions are non-recourse transactions, if the factor does not have sufficient competence to provide non-recourse factoring services to clients within Russia? In addition, international factoring is difficult to develop without being a banking structure, which is due to imperfection currency legislation," he says.
Thus, there is practically no competition in the Russian international factoring market - the main players in this area are Promsvyazbank OJSC and NFC Bank.
WITHOUT LOSS
In general, there are two types of services within the framework of international factoring. The service for Russian exporters is export factoring, and the service for foreign factoring companies is import factoring. Export factoring allows Russian suppliers to make shipments to foreign buyers with a deferred payment, and the factoring company can finance this deferred payment, while at the same time taking on the risk of possible non-payment for the goods. Import factoring allows foreign factoring companies to service their clients' export deliveries to Russia without the risk of loss, which, in turn, gives Russian importers the opportunity to receive deferred payment from their foreign suppliers without the need to provide them with bank guarantees or open letters of credit.
The main difference between international factoring and other products used in international practice is a range of services. It includes not only supplier financing, but also receivables management and risk insurance. It is important to note that the financing itself is unsecured. According to Viktor Nosov, Vice President and Director of the Factoring Operations Department at Promsvyazbank, one of the difficulties in developing international factoring is that Russia is not included in the list of countries that have acceded to the Convention that provides the legal basis for factoring contracts and the assignment of monetary claims. "Therefore, Russian factors are forced to independently adapt international factoring products to the norms of Russian legislation, including currency legislation," Viktor Nosov explains.
The volume of international factoring depends on two factors: the first is the volume of trade with the country, the second is the presence in this country of a factoring company that is a member of the international factoring association. There are currently two such associations - International Factors Group (IFG) and Factors Chain International (FCI). "The need for the participation of a factor in one of these organizations is due to the specifics of risk assessment in international factoring," says Alexander Fedorov, deputy general director of the factoring company Life. "This is due to the fact that it is difficult for the supplier factor to assess risks and finance its deliveries to the debtor located in another country. And the factoring association acts as an intermediary in such transactions, providing the factor of the supplier with services for checking and assessing the risk of the debtor."
"NON-PRICE" FACTOR
The use of factoring has a number of advantages over traditional means of risk insurance in international deliveries - letters of credit and guarantees, which do not solve the problem of a supplier's lack of working capital. And factoring allows not only to insure possible risks of non-payment on the part of the debtor, but also to receive earlier financing for this delivery.
International factoring is easier to organize, it does not require transaction confirmations from international banks with a rating of at least AAA, which gives this tool an advantage in speed and ease of use. "The advantage of import factoring over letters of credit and guarantees is the ease of execution," explains Victoria Mitrofanova. "Documents are drawn up not for a one-time transaction, but for the entire period of work with the supplier. No commissions are charged directly from the buyer - the commission for "factoring coverage" import factor charges from the export factor". In this case, there is no need to provide collateral, as with a letter of credit form of payment, and the buyer does not bear additional costs, such as opening and securing a letter of credit. Finally, factoring financing is of a revolving nature, which means that there is no need to execute each transaction, which is beneficial for both the supplier and the buyer. Factoring 100% eliminates the risk of non-payment on the part of the buyer, while the insurance company "works" in the range of only 70-90%. "The main advantages of factoring are direct financing of a supplier, unsecured financing, a simplified procedure for making a decision on working with a particular supplier or debtor within a factoring transaction," concludes Dmitry Malov. "Finally, the tariff rates of international factoring are more competitive compared to letters of credit and guarantees ".
Undoubtedly, the cost factor plays an important role for exporters and importers when choosing one or another financial instrument for settlements between counterparties. "As a rule, the costs of the financial product used are included in the cost of the goods, which cannot but affect its final price," says Oksana Nekhvorosnaya. clients than international factoring operations.At the same time, the advantages of international factoring operations over other types of settlement and credit operations are rather “non-price.” Factoring operations as a means of insuring the risk of non-payments, organizing settlements and financing export deliveries are more efficient, since they, relying on relatively more favorable for importers terms of settlements on an open account and an optimal system of payment guarantees for exporters, allow expanding the possibilities of financing trade turnover of clients.
MODIFY THE BASE
However, despite the advantages of international factoring over other financial products used in export-import transactions, there are many objective reasons hindering the development of this area. According to Timur Tsvetkov, Managing Director of VTB Factoring, many banks and financial companies are wary of international factoring because of the complexity of its implementation. "After all, such a transaction involves several parties with completely different financial reporting standards and reduces the transparency of financial transactions," he says. "We expect that the government's support to bring national accounting closer to international standards will have a significant effect on the development of international factoring."
"In our opinion, it makes sense to refine the legislative framework, for example, in terms of the possibility of VAT refunds in factoring," Kirill Pokrovsky, Deputy Director of the Factoring Department at Petrocommerce Bank, agrees with his colleague. It's about on the need to include factoring in the list of operations that are not subject to value added tax.
But the most significant changes, according to experts, need to be made to the currency and civil legislation. Victoria Mitrofanova believes that the stable development of the product is hampered by the lack of legislation in this area that would regulate relations between participants in the international factoring market in the Russian Federation. "It would be nice to ratify the UNIDROIT Convention," she adds.
Corneliu Robou also believes that currency restrictions are the main obstacle to the development of export factoring. In particular, the requirement for the repatriation of foreign exchange earnings to accounts opened with authorized banks, and the requirement for the mandatory maintenance of transaction passports. This leads to the fact that in principle it is difficult for exporters to work on a deferred payment basis, regardless of whether they use factoring or not. “So, if an exporter works on a deferred payment and his foreign buyer does not pay for the delivery in a timely manner, then an administrative fine of up to 100% of the unreturned foreign exchange earnings may be imposed on him,” he explains. “In addition, the legislation does not clearly describe the procedure for obtaining factoring by the company of payments from a foreign buyer, whose monetary claims the exporter ceded to the factor, taking into account the exporter's obligation to ensure the return of foreign exchange earnings to their accounts.
Finally, the 43rd chapter of the Civil Code of the Russian Federation needs to be brought into line with international and Russian practice of factoring operations. Corneliu Robu believes that the concept of "financing against the assignment of a monetary claim" used in the Civil Code does not fully reflect the essence of the subject area. “The factor assumes at least two of the following responsibilities: financing the supplier; maintaining accounts for liability claims; presenting accounts receivable for payment; protecting debtors from insolvency,” he says. whole line amendments protecting the rights of the factor, for example, a ban on the re-assignment by the client of monetary claims previously assigned to the factor.
GROWTH FACTOR
Experts admit that there are prospects for international factoring in Russia - of course, the share of this direction in the sector of international financial services will grow over time. "The international factoring market is in its infancy, so there is still big job so that international factoring takes its rightful place in the financial services market," Victoria Mitrofanova is sure. But this is provided that, in addition to international factoring associations, analogues of such associations will develop in Russia, which will enable Russian factors to more effectively implement their projects on international factoring Giving their members access to technologies that are new to them, international factoring associations should play a significant role in the development of international factoring, agrees Kirill Pokrovsky.
"Practice shows that international factoring is in demand and there are prospects for its development," notes Oksana Nekhvorosnaya. "Unfortunately, the lack of transparency of business in a number of companies, the imperfection of currency legislation and the unstable state of the economy hinder the development of this area of factoring." Import factoring could show large volumes, but the lack of centralized credit bureaus for companies in Russia greatly slows down this process. However, over time this question will be resolved, and as the infrastructure of factors develops, the market will begin to actively gain momentum.
"The development of international factoring will allow more companies to whitewash their cooperation schemes with partners from other countries," Dmitry Malov believes. tax legislation will allow players to enter into direct contracts, which, in turn, will provide an opportunity for direct financing of suppliers for international factoring."
WHAT TYPES OF INTERNATIONAL FACTORING DO YOU PROVIDE?
Boris MELNIKOV, general manager OOO "FactorRus"
"Currently, our company offers all types of international factoring, which includes export factoring with recourse, export factoring without recourse and import factoring. Efficient implementation operations of international factoring is possible due to membership in the international factoring associations FCI and IFG. We are able to meet the needs of companies that carry out foreign economic activity. The introduction of new products for international factoring by our company is not planned in the near future. This can be explained by several factors: lack of awareness and appropriate understanding of the products of international factoring of companies engaged in foreign economic activity, poor promotion and popularization of this type of factoring by the participants themselves Russian market factoring, as well as small turnovers on these products. "FactorRus" pays Special attention building up work with counterparties of the CIS countries, since a very small number of companies from these countries are represented in international factoring associations, which limits the ability to work on this species factoring".
Victor NOSOV, Vice President, Director of Factoring Operations Department, Promsvyazbank
"We have been carrying out international factoring operations since 2004. The Factors Chain International Association, of which we are a member, awarded Promsvyazbank the status of full member, the first Russian participant in the factoring market. We cooperate most actively in export through factor partners with France, Ukraine, Bulgaria, the Czech Republic , Germany, Italy. According to the one-factor model, export transactions are successfully carried out with the CIS countries (Kazakhstan, Belarus). , Germany, Spain, Taiwan.As part of export factoring in Russia, a large share of the market is occupied by recourse transactions, as a rule, when exporting to the CIS countries.In general, we provide access to more than 60 countries.The main difference between international factoring and other products used in international practice is the absence of collateral and complex of services".
Konstantin OVCHAROV, Head of Factoring at UniCredit Bank
"Today, both import and export factoring are equally in demand in the bank, although most of the transactions are carried out on imports. On the one hand, the potential of import factoring is much greater and the structure of imports is more suitable for factoring. On the other hand, our importers, as a rule, have problems with financial stability. Most of them are enterprises specially created only for foreign trade, so you need to analyze the entire group, sometimes ask for additional guarantee. When importing, you need time to receive the goods, clear them through customs and resell. To do this, you either take out a loan, or receive a payment deferment.Our export factoring clients are medium-sized enterprises that provide a deferral of payment to a foreign counterparty.Often such a deferment is a powerful competitive advantage. The emerging need for financing is ideally covered by factoring. It is also significant that the main final risk is the risk of the buyer-importer. Often such a buyer is a world-famous company, and the price terms of factoring financing are cheaper than a simple bank loan. Compared to a letter of credit, export factoring is not so regulated - it is simpler and faster."
Factoring is a financial instrument that allows you to work on international transactions with deferred payment. At the same time, the risks that often arise in such contracts are minimal. And this is very important in the realities of today's unstable economy.
International factoring is a variant of a factoring operation that provides settlements for the supply of goods and services with a deferred payment between the seller and the buyer, if they are representatives of different countries. If international partners are characterized by a large turnover and regular deliveries, which is often the case with long-term and open-ended foreign economic contracts, a complex of financial services is indispensable.
Parties to international factoring
Three types of participants interact in this operation:
- The factor company, sometimes referred to simply as the Factor. In this role, as a rule, there is a bank or other financial company that redeems the monetary claim. Simply put, the main task of the Factor is to pay the supplier a part of the importer's receivables. If factoring is two-factor, accordingly, there will be two factoring organizations.
- Goods supplier (exporter). Produces and/or sells services or products. It is in his interest to get paid as soon as possible.
- Buyer of goods (importer). Has monetary obligations to the supplier and is interested in the maximum possible delay in payment for the goods.
The main task of factoring
International factoring creates a compromise between the interests of the supplier and the buyer in terms of settlements. Both of them achieve their goals due to the fact that the neutral party - the Factor Company - fills in the "gap" in the trading operation with its own money.
That is why factoring services are becoming more and more popular. They are indispensable in the following cases:
- Between partners there is still no experience of respectable business relations, there is no 100% trust in each other.
- Partners prefer to do without a pledge of property and conduct a transaction with the least risk, due to the short duration of the procedure.
- The laws of the countries where the importer and exporter are residents have significant differences. Therefore, the conclusion of a contract involves the risk of mutual non-compliance with the agreement.
- The painstaking function of managing receivables is delegated to a third-party firm.
An example of international factoring
From July 15, Transformer Plant LLC (supplier) concludes a contract for the supply of goods with the Russian Trading Company (buyer) in the amount of 500,000 rubles. According to the documents, the products must be paid for before July 25.
In order to receive the money as soon as possible, on July 20, Transformer Plant enters into a factoring agreement with the Ilteza (Factor) commercial bank, thereby transferring to it its right to claim money against the Russian Trading Company.
On July 21, Ilteza transfers 70% of the receivables - 350,000 rubles to the client's account.
July 26 Russian trade company transfers to CB "Ilteza" the amount of debt - 500,000 rubles. From this amount, the Factor retains the remuneration due to him, and transfers the remaining part to the Transformer Plant.
International factoring in Russia
In our country this instrument international trade has just begun to gain momentum. However, it is worth taking a closer look at it, since such a service is beneficial and convenient for all participants in the Contract. Let's consider in more detail.
Customer: receives a trade credit; purchased at discounted prices; replenishes working capital without pledging property; achieves greater turnover, as a result of which profitability increases; reduces taxable income by including the cost of services in non-sales costs and in the cost price.
The supplier: receives most of the payment in the first days after the shipment of the goods; increases sales volumes; reduces the risk of non-payment; receives professional advice and information and analytical support from the Factor.
It is worth saying that the Factor also does not remain in the loser. The cost of factoring services is always calculated in different ways and consists of several different commissions: for registering a monetary claim, directly for factoring services, for providing funds, for covering the risk of non-payment by the Buyer, etc. Other payments may also be established at the request of the Factor.
In conclusion, we note that you can learn more about the legislative factoring market on the website
international marketing factoring forfaiting
International factoring is a set of factoring services provided by banks or factoring companies to their clients who carry out foreign trade settlements. Those. international factoring assumes that the buyer and the seller, making settlements between themselves with a deferred payment, are residents of different countries. International factoring can work on a one-factor or two-factor model.
One factor model
The seller/supplier (exporter) and the bank/factoring company that finances it (export factor) are located in the same state. The buyer (importer) is a resident of another state.
Fig.1.
1. Conclusion of an international factoring agreement, in the presence of an international contract between the seller-exporter and the buyer-importer.
2. Evaluation financial position importer buyer, setting a financing limit.
3. Supply of goods (products) for export in accordance with the concluded foreign trade contract.
4. Providing the bank or factoring company with shipping documents specified in the factoring agreement.
5. Receipt from the buyer of proceeds under an international contract, after which the final settlement between the bank / factoring company takes place with the seller-exporter with the bank holding its commission. In case of non-receipt of revenue, the risks are borne by the bank / factoring company (analogy of factoring without recourse).
In such a scheme of international factoring, the export factor assumes the functions of international settlements under a foreign trade contract, as well as all the risks of non-payment or late payment on the part of the buyer-importer.
Two-factor model
With this model of international factoring, there is a fourth participant - an import factor - a bank or a factoring company that is a resident of the same state as the importing buyer. The two-factor model of international factoring involves the division of functions between the export factor and the import factor. The import factor assesses the solvency of the buyer-importer, sets a financing limit, receives the proceeds under the contract from the buyer-importer and transfers it to the export factor. In this case, the import factor assumes the risks associated with non-payments. The export factor carries out settlements under a foreign trade contract, finances the seller in the amount established by the import factor of the financing limit.
Fig.2.
1. Conclusion of an international factoring agreement in the presence of an international contract between the Seller-exporter and the buyer-importer.
2. The export factor sends a request to the import factor for evaluation by the importing buyer.
3. The import factor checks the buyer-importer and sets the financing limit.
4. The seller-exporter delivers the goods (products) in accordance with the foreign trade contract concluded with the seller.
5. The seller provides the export factor with shipping documents.
6. The export factor finances the exporting supplier within the limit set by the import factor.
7. The buyer-importer pays for the goods in accordance with the terms of the foreign trade contract concluded with the supplier-exporter.
8. The import factor transfers to the export factor the proceeds received from the buyer-importer minus its commission. After that, the export factor makes the final settlement with the seller-exporter with an invoice for the services rendered.
Banks or factoring companies acting as export factors or import factors must be members of one of the international factoring associations: International Factors Group (IFG) or Factors Chain International (FCI).
Membership in international factoring associations, first of all, increases the prestige of banks / factoring companies - participants in international factoring. In addition, international factoring associations provide their members with access to their extensive database, which includes the most up-to-date information about suppliers and buyers, as well as statistical and analytical data on the factoring market.