Risk Coverage

Whether dealing in U.S. dollars or in a foreign currency, every international transaction has inherent risks such as country risk, risk of non-payment from foreign buyers, risk of non-delivery from foreign suppliers, and, when a foreign currency is involved, foreign exchange risk. Santander Bank, N.A. (“Santander”) is prepared to assist your company in mitigating these risks.

Country Risk

Country Risk is the risk of investing in a foreign country. It includes all the risks that are specific for the country and that will affect the local companies’ transactions with foreign investors. It includes political risk, economic risk, or transfer risk, which is the risk of the government or central bank not allowing capital to move out of the country. There are insurance policies from the Export-Import Bank of the United States Ex-Im Bank and some private insurers that can protect an exporter against the occurrence of these events.

Payment and Delivery Risk

Payment risk is the risk of not getting paid or getting paid late by your buyer. Delivery risk is the risk of your foreign supplier not being able to fulfill its side of the sales agreement.

Ideally, your company would diminish these risks by selling under cash in advance terms or buying on open account. However, when these are not possible, you can also reduce the risks of non-payment and non-delivery of a certain transaction by using a different payment method such as Documentary Collections and Letters of Credit.

Foreign Exchange Risk

Currency or Foreign Exchange (“FX”) risk occurs when a US company buys or sells in a currency different than US dollars, and is generated by the volatility of the price of one currency against the other.

Santander Bank offers you a wide range of FX products to mitigate currency risk for your international transactions.

Spot Contract

A spot transaction is a contract to buy or sell a fixed amount of foreign currency at a fixed price for a settlement that is typically two business days.

Forward Contract

A forward contract is a contract to exchange two currencies at a specific time in the future greater than two business days (settlement date) at a rate fixed in advance (forward rate).

Currency Option Contracts

Currency options give you the right, but not the obligation, to buy or sell a fixed amount of foreign currency at a specified exchange rate (strike rate) on or within a specified time period (maturity).

Currency offer of Santander Bank Foreign Exchange products:

Spot Delivery	Forward	Forward Windows
Australian Dollar Canadian Dollar Swiss Franc Euro British Pound Japanese Yen Mexican Peso Czech Koruna Danish Krone Hungarian Forint Norwegian Krone New Zealand Dollar Polish Zloty Swedish Krona Hong Kong Dollar Singapore Dollar Thai Baht Turkish Lira South African Rand Romanian Leu Argentine Peso Brazilian Real Chilean Peso Colombian Peso Indian Rupee	Australian Dollar Canadian Dollar Swiss Franc Euro British Pound Japanese Yen Mexican Peso Czech Koruna Danish Krone Hungarian Forint Norwegian Krone New Zealand Dollar Polish Zloty Swedish Krona Hong Kong Dollar Singapore Dollar Thai Baht Turkish Lira South African Rand Romanian Leu	Australian Dollar Canadian Dollar Swiss Franc Euro British Pound Japanese Yen Mexican Peso Norwegian Krone New Zealand Dollar Swedish Krona