In the agency import business, the bearing subject of the exchange rate difference is usually determined through negotiation between the consignor and the agent in the contract. Generally speaking, if the agent only provides agency services and does not bear the price of the goods and related risks, the exchange rate difference is mostly borne by the consignor. Because the consignor is the actual demander and the beneficiary of the goods, and is more sensitive to the cost changes brought by the price of the goods and exchange rate fluctuations.
However, if the agent promises a fixed import cost when acting as an agent for import, then the exchange rate difference may be borne by the agent. When signing the contract, the method of determining the exchange rate should be clearly agreed upon, such as taking the exchange rate on the contract signing date, the letter of credit opening date or the payment date as the standard. At the same time, the scope of responsibilities of both parties for the risk of exchange rate fluctuations should be clearly defined. If there is a significant fluctuation in the exchange rate, clauses such as price adjustment through negotiation by both parties can be agreed upon to protect the interests of both parties.
Professional consultant answers
David LiYears of service：6Customer Rating：5.0
Senior customs declaration consultantConsult
In the agency import business, the bearing subject of the exchange rate difference is usually determined through negotiation between the consignor and the agent in the contract. Generally speaking, if the agent only provides agency services and does not bear the price of the goods and related risks, the exchange rate difference is mostly borne by the consignor. Because the consignor is the actual demander and the beneficiary of the goods, and is more sensitive to the cost changes brought by the price of the goods and exchange rate fluctuations.
However, if the agent promises a fixed import cost when acting as an agent for import, then the exchange rate difference may be borne by the agent. When signing the contract, the method of determining the exchange rate should be clearly agreed upon, such as taking the exchange rate on the contract signing date, the letter of credit opening date or the payment date as the standard. At the same time, the scope of responsibilities of both parties for the risk of exchange rate fluctuations should be clearly defined. If there is a significant fluctuation in the exchange rate, clauses such as price adjustment through negotiation by both parties can be agreed upon to protect the interests of both parties.
Emily LiuYears of service：10Customer Rating：5.0
Settlement and payment expertConsult
Generally, it depends on how the contract is signed. If there is no special agreement, the probability that the consignor bears the exchange rate difference is high. After all, the future profit of the goods belongs to the consignor, and risks correspond to returns.
Sarah ZhangYears of service：8Customer Rating：5.0
Document expertConsult
If the agent and the consignor have a good relationship and the agent wants to have a long-term cooperation, sometimes the agent will also appropriately share part of the exchange rate difference. It specifically depends on the negotiation between the two parties.
Elizabeth LiYears of service：3Customer Rating：5.0
Compliance and risk managerConsult
If it is agreed in the agency import contract to settle according to a fixed RMB amount, then the exchange rate difference will be borne by the agent. So the contract terms are very important.
James LiuYears of service：10Customer Rating：5.0
Foreign trade tax refund consultantConsult
The consignor mostly bears the exchange rate difference because the agent mainly earns the agency fee and usually does not take on the exchange rate risk of the goods. The consignor will also accept this to ensure the supply of the goods.
Andrew HuangYears of service：7Customer Rating：5.0
Supply chain optimization expertConsult
If the consignor manages to obtain a certain exchange rate fluctuation range in the contract, the consignor will bear the risk within the range, and the agent will bear part of the risk outside the range. This is also a way.
Robert ChenYears of service：6Customer Rating：5.0
Customer service consultantConsult
Who bears the exchange rate difference depends on the negotiation abilities of both parties. If the consignor is powerful, it may make the agent bear more; if the agent is dominant, the consignor will have to bear the major part.
Amanda YangYears of service：3Customer Rating：5.0
Cost control consultantConsult
An exchange rate adjustment mechanism can be set up in the contract. According to the amplitude of the exchange rate change, the payment for the goods can be adjusted according to a certain proportion, so that both parties will bear part of the risk.
Michelle ChenYears of service：3Customer Rating：5.0
Business coordination consultantConsult
Most of the time, the agent does not want to bear the exchange rate risk, so the contract may clearly state that the consignor bears it. The consignor should consider the impact of exchange rate fluctuations in advance.