How we talked a client out of a $500,000 deal with an unreliable counterparty
A Ukrainian steel producer was preparing its first major export deal, worth $500,000, with a Dutch trader. The counterparty looked solid, but even a superficial check showed that the company had been registered 8 months earlier and that its ultimate beneficial owner was a defendant in two court disputes over failure to perform obligations.
We carried out comprehensive due diligence: we checked the registration data at the Netherlands Chamber of Commerce, the court register, the financial statements and the company's reputation in industry networks. We recommended requiring a letter of credit as the form of payment and export credit insurance. The client listened and walked away from the deal.
Four months later the trader defaulted on other suppliers. The Ukrainian producer found an alternative buyer through our Scandinavian office in Denmark and signed a $380,000 contract with safe payment terms.
"We were ready to ship the cargo. Without BROER's check, we would now be fighting for our money in a Dutch court."— Sales director of a steel plant
