Legal risk management of global supply chains

Protect your supply chain or pay the price

The shape, patterns, connections and the whole topology of global supply chains are the result of a decade of deep economic integration of international trade and investment. Production processes that are often spread across dozens of firms operating in multiple countries increased the level of complexity. Under global supply chains, the distribution, outsourcing, contract manufacture of large components are outsourced to a variety of third parties. Commercial agreements typically have various interaction points between different supply chain actors. A contractual breach of one element might result in defaults, liquidated damages, force majeure, etc. upwards or downwards the supply chain.

In order to prevent supply chain disruptions, it’s critical to identify and manage all types of legal risks.  Main legal risks can be separated into contract risks including IP infringements and compliance risks including bribery and corruption. Contracting arrangements might depend on a small number of key suppliers and some industries are more vulnerable to legal risks than others. Insurance contracts should be adjusted to the specific situation and risk awareness of the participants engaged in international commerce.

Commercial risks as a result of the coronavirus are currently in the general focus. However, extraordinary risks also include the impact of sanctions on certain countries, individuals, businesses, and other entities as well as export control regulations for military or dual-use items. Suppliers will declare force majeure when they cannot deliver on time or possibly at all, or want to change the goods to be delivered. Buyers will declare a default, material adverse change, or use a similar concept to shield against contractual obligations due to an unprecedented drop in demand. Shipping companies will face issues as cargo levels will not meet fuel costs. Letters of credit will be blocked on the basis of a claim in fraud brought before a Chinese court. Some suppliers or buyers will face the risk of insolvency.

Supply Chain Risk Asia – Virtual Summit – March 25-26, 2020

The supply chain risk environment is dynamic and continually evolving. Risks are increasingly being highlighted in companies’ publicly-filed financial statements and as supply chains become more strategic, disruptions are turning into top management issues.

Designed for procurement and supply chain professionals worldwide, the 2-days virtual summit gives attendees the opportunity to learn about the latest developments in the discipline of supply chain risk management, network with other professionals in the field and bring home practical, actionable insight that will make your supply chains more resilient in Asia.

Unlike physical conferences where you can end up sitting through the content you just don’t need, Supply Chain Risk Asia is delivered entirely online. Dip in and watch the specific talks you need to transform your supply chain operations in Asia or catch them all. It’s up to you!

Session by Dr. Ulrich Eder, Managing Director, Pugnatorius Limited.

800+ executives watched the live show. All the replays are now available at Supply Chain Risk Replays

 

Revealing hidden vulnerabilities: How to make the global supply chain coronavirus-fit

The Coronavirusoutbreak has an impact on labor, movement of goods, and provision of services. This is relevant for raw materials, suppliers, manufacturers, distribution, retailers, and customers. International supply chains are currently crumbling and this typically does not happen without disputes or even litigation. The online speech will address all relevant legal aspects including force majeure, default scenarios, and the enforcement of arbitration judgments in China.

Supply chain contracts include the sale of goods contracts, distribution agreements, reseller agreements and manufacturing agreements. Key clauses are payment and pricing provisions, the risk allocation, material breach and default clauses, subcontracting, as well as the contract term and termination provisions. The presentation will look at the whole supply chain from a Thai legal standpoint. 

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