Financial aspects of international operations: Case study – weapons export to Brazil

Résumé du document

In the framework of the "financial aspects of international operations" we were invited to analyze the case of exporting weapons from Belgium to Brazil.
We are going to introduce the analysis with a description of the weapon sector in Belgium and in Brazil. In this description, we will present the regulations imposed by the Belgian State to extract weapons out of the Belgian territory. And the regulations that have to be respected to be allowed to get on the Brazilian weapons market. This foreword will lead us to develop the financial strategy. In the strategy, we will first describe the potential customers. We will also include the means of payment, the financial tools that will limit the risks of fluctuations and currency exchange, and explain the associated clusters which could help us in our strategy. When we were looking for a strategy to export, we had to go through some inquiries. In order to find answers, we met some strategic persons involved in the weapons industry. We met a gunsmith of the center of Brussels who has been involved in this business for many years. We also called the Brazilian Chamber of Commerce and Industry in Brussels for export to have information about the regulations at the entrance of the Brazilian territory. We also took knowledge of what the AWEX was competent for, in our case.

Extraits

[...] They constitute then the basis of a sort of jurisprudence applicable, elaborated in application of the European Code of conduct and settling the reliability level of a final recipient 4. Besides, the Administration has regard, when introducing new files, for recipients viewed as untrustworthy by other occidental countries A posteriori, the Walloon region requests that the arrival in good terms of the delivered equipment is confirmed by the sending of official documents called pieces of evidence of arrival to destination and emitted by the customs services of the country of destination. [...]

[...] In order to find answers, we met some strategic persons involved in the weapons industry. We met a gunsmith of the center of Brussels who has been involved in this business for many years. We also called the Brazilian Chamber of Commerce and Industry in Brussels for export to have information about the regulations at the entrance of the Brazilian territory. We also took knowledge of what the AWEX was competent for, in our case Description of the Belgian weapons sector Belgian Regulations for this sector Description of the sector in Belgium In opposition to large European countries such as France or Britain, the armament production in Belgium has never been an instrument to reflect the country's power and sovereignty. [...]

[...] We have been studying business and economics for four years now. We have then, become aware that export is getting more and more important in trade as the world is becoming more and more global. This case's analysis has lead us to go deeper in the comprehension of what are the financial tools to use in order to limit the risks linked to the export operations. Thanks to this paper, we have also learned that there are many risks, not only financial ones, to take into consideration. [...]

[...] Regarding the air transport, military ones have to be conformed to the related regulations and processes. The transporters have to be transport agent they are in charge of purchasing the necessary overflight authorization from Brazilian authorities. In order to be complete, the transportation is manly handed by cargo companies and air freight agencies. Regarding the sea transport, shipment could be locked in sealed containers. The cargo companies or agencies are for this reason special crew. All shipments have to be inspected in transit and at the reception point in Brazil. [...]

[...] The minimum duration of an offer in the Belgium territory is 9month. That means that during this delay, the Belgian company will analyze the offer, the feasibility and will organize the preparation, travel and expedition of the goods. In simple terms, letter of credit is an undertaking by a bank to make a payment to a named beneficiary within a specified time, against the presentation of documents which comply strictly with the terms of the letter of credit. The bank is obliged to pay the seller only if the documents presented by the seller are in accordance with all the conditions indicated in the documentary credit. [...]