What can go wrong in structured trade and commodity finance — lessons for China
Structured trade and commodity finance (STCF) is central to international trade and is progressively becoming an important source of finance for Chinese companies, given that China is now the most significant player in the commodities market. Since the introduction of the free-trade zones (FTZs) in China, there has been increasing discussion among Chinese leaders on how to implement a robust legal framework and infrastructure to attract more global companies into the market. While this is unlikely to have any significant effect on the STCF market, it is a step in the right direction provided that financiers do not lose sight of the risks inherent in STCF.
STCF structures have a long history in the Russian and Latin American markets and some of the risks arising from these structures offer valuable lessons to any player in the market. Typically, the structures themselves are robust, but as these transactions depend largely on verifiable and secure tracking of physical goods the primary risk in these structures has always been, and remains, that of fraud. This article examines some of the common things that can go wrong in STCF and what financiers can do to protect their position, particularly in China…
If you are registered and logged in to the site, click on the link below to read the rest of the DLA Piper briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from DLA Piper
News from The Lawyer
Briefings from DLA Piper
Health Alert — Julia Clare v Australian Community Pharmacy Authority; Dr Reid v Medical Council of NSW; and more
DLA Piper has released the 22 December 2014 issue of its Health Alert, which focuses on judgments, legislation and reports in the health sector.
The European Court of Justice (CJEU) has handed down a landmark judgment concerning the patentability of stem cells in Europe.
Analysis from The Lawyer
Regulators are ramping up the pressure in the aftermath of recession, leaving firms to compete for compliance and restructuring work
Shearman & Sterling is making its presence felt in the City, squaring up to magic circle firms and looking to muscle in on key relationships. Private equity house Bridgepoint is one outfit that has had its head turned by the US firm.