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International Trade Finance

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Analyze the major elements of international trade to determine why there is more risk here than
in domestic trade. Make at least one recommendation for mitigating the risk(s) you have
identified.
Considering that one of the major components to international trades is surrounding taxes
and payment, mitigating risk within these parameters is crucial. It would be more difficult to
track these payments if regulatory compliances are implemented and/or audited accordingly. One
mitigation factors would be to include all transactional payments, internal and external, in which
organization must furnish to the government in which they either import to and/or export from.
For example, trade agreements between countries can enforce partnership documentation,
indicating financial income, thus, a comparative aspect between both organizations financial
records, thus, potentially uncovering discrepancies within the financial reporting to their
respected country. The risk stems from uncontrollable factors of determining financial
accountability in which internationally traded partnering organizations are not subjected to US
regulatory compliances. This would forces US organization to obtain financial records from their
partners located outside of the US jurisdiction. Compliance can mitigate these financial issues
therough the regulatory compliance placed upon US organizations.

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