Re-export

One of the most ancient foreign trade deals is re-export, in which the same export goods connect traders from at least three countries.

The initiator, organizer and often financier of the transaction is the re-export trader, who is actually a reseller working in international trade. The traditional re-exporters of some nations are almost unbeatable in a business that requires great information, foreign trade know-how, ingenuity, fifica, prudence and caution. 

Features of the deal: 

• the re-exporter connects an import and an export through the same goods, the goods bought abroad are always sold abroad, but in another country;
• the re-exporter is usually a "desktop" trader, he usually does not even see the goods, he only works with documents; 
• the re-exporter's deals are often ad hoc in terms of business partners and goods; 
• the re-exporter's deals are not necessarily legal, so they are often very risky.

The primary goal of a re-exporter is to make a profit: to buy the goods cheaply in country "A" and sell them profitably in country "B". Typical re-exporters traditionally buy bulk goods (such as cotton, tobacco) at depressed prices and sell them around the world, often at a considerable profits. 

However, re-export can also be justified by marketing purposes. This may be the case, for example, when we want to supplement our export goods selection with foreign goods or we want to involve foreign subcontractors in an export-main contractor deal. It may also be of interest to our foreign customer to sell our product in a country where we do not have relations. 

Re-export transactions may differ due to the purpose of the transaction, the route of the goods, the coverage and legality of the transaction. According to the route of the goods, re-export is direct or indirect. In the first case, the re-exported goods do not pass through the intermediary trader's country (the method of transport does not justify this, or the transaction is secret). In the case of indirect re-export, the goods affect the country of the re-exporter.

In addition to undisguised and not prohibited re-export transactions, there are also a large number of prohibited and therefore secret transactions in the world. For reasons of marketing purposes, the exporter can prohibit the re-export of his products, either in general or only to certain countries. 

Re-export may also be prohibited due to some state regulation. Such a case is, for example, when some countries can impose an export ban (embargo) on their products for political reasons on the markets of specific countries. In the latter case, re-exporters act very carefully in order to minimize the risk. The goods are neutralized: signs indicating their original origin are removed, the goods are given a new image with new presentation and packaging, new documents are issued and/or obtained. In addition, for such transactions, the transport is also organized very carefully (for example, by carefully choosing the means of transport and the transport route). 

A re-export is a very risky deal, apart from the risks of failure. In addition to the usual risks of import and export, the intermediary trader must also bear the specific risks arising from the nature of re-export. Such a risk can be 

• concluding a so-called unsecured buy transaction in the hope of later sale, if the goods remain on your neck or you can only sell them at a loss; 
• sells goods that do not yet exist in the hope of a favorable purchase later, but cannot purchase the sold goods; and 
• which is the most serious (because it can even result in a prison sentence): the risk of indiscretion, i.e. the deliberate evasion of the export ban becoming public.