Mitigation of risks for SME’s doing business internationally

Doing business abroad may expose an enterprise to unknown and unprecedented risks; one may think about a product liability case or an indemnity or commission claim from a poorly contracted agent or distributor. Or, closer to home, a sanction imposed for a failure to follow a posting related formality. Small mistakes can have large consequences.

We developed a risk mitigating solution.

More and more often, clients ask for a solution to mitigate risks of doing business internationally. Generally, pulling a risk mitigation wall up within a group of companies results in unworkable situations and inefficiency.

Our decades of international legal, multidisciplinary experience have been the fundament of what we have called ‘Risk Mitigation Modeling’ or ‘RMM’; RMM results in the creation of a ‘Risk Mitigation Structure’, abbreviated ‘RMS’, designed for use by internationally operating small and medium-sized enterprises.

When applying Risk Mitigation Modeling, a variety of aspects associated to doing business internationally including risk exposure, is taken into account, e.g. management and management liability aspects, contracting foreign resellers and potential (mandatory, loi de police) applicability of foreign law, designing international supply chains including the use of ICC and UCC terms, licensing and use of intellectual property and the performance of services abroad.

Essence of a Risk Mitigation Structure is (a) maximized shielding of crown jewels like IP and other assets of a company from (b) commercial risks of doing business, whereby (c) a company’s continuity and optimal, operational workability are leading, next to (d) a maximized encapsulation of non-commercial risks.

Our RMS module can be combined with Struccorp, a model we have been using for many years, enabling international inter-company assignments.

Van Velzen C.S. is, for and together with a number of SME clients, working on the modeling and implementation of a Risk Mitigation Structure.

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