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.
[...] The convoys have to be equipped with protection measures as (alarm system, electronic tracers The rood trip has to be strictly planned and followed. The SWOT Analysis of the sector Strengths : Weaknesses : -tenth most important weapons - huge black market producer - smuggling -diversification - bankruptcy after the 80's -close to target market - hard competition -legal guns ownership - regulations more and more precise -competitive prices due to competitive workforce -niche sector ( always need weapons) -relevant Brazilian skills -armies with increasingly financial resources Opportunities : Threats : -worldwide market evolving -government measures against weapons -wars everywhere possession -conflicts in the middle east are -legal framework more and more not going to stop immediately complicated -united states represent a really -new laws against the buying or huge market possession of weapons -import regulations ( good for -public opinion national production) -lots of accidents leading to bad -export-oriented economy image of gun possession -attractive economy to foreign -too high level of criminality in investment Brazil( bad for the image of this sector National disarmaments statute in 2004 -EU code of conduct on arms exports -larger transparency asked Needs of the Brazilian state Brazil already exports a lot, but still, is considered as protectionist. [...]
[...] The Brazilian state which makes the deal with Belgium to import arms, will contact its own bank (the central Bank of Brazil) to save a determined amount of money for the payment of the order and to guarantee that the state is solvable. The Brazilian bank will send the “documentary credit” to the Belgian bank which will receive it and will have to confirm the order. Thus, we will use the documentary credit as a warrantee of payment. The documentary credit : In this case, the seller beneficiary is of course Belgium when the buyer applicant will be Brazil. [...]
[...] Non-financial aids The aids a Belgian company exporter of armament can benefit from aid and subsidies coming from the AWEX, SOFINEX But it can also benefit from non-financial support, such as advices from the chamber of commerce for export to Brazil in the sector of armament. What is specific to the FN is that it is part of clusters. This enables it to benefit from experiences and grouped shipment from the others companies included in the same clusters. Official Export Organisations Foreign Trade Agency: www.abh-ace.be Ministry for Foreign Affairs, Foreign Trade and Development Cooperation: http://diplobel.fgov.be Flanders Investment & Trade: www.flandersinvestmentandtrade.be Foreign Trade Department Brussels: www.brusselstrade.be Walloon Export Agency - AWEX: www.wallonia-export.be Potential customers Concerning our potential customers, in our case, the final recipient is the state. [...]
[...] This law has some major principles: To suppress the arms over-the-counter: Belgium has established a general interdiction, the possession and the carrying of weapons are subject to a preliminary authorization. The way to sell arms over-the- counter is now forbidden. Nevertheless, for there is an exception for people who have a hunting license or for sport activities. The licenses have a limited duration of 3 years but for sport and hunting activities, a license is not mandatory. To regulate the access and the steps to become gunsmith: Now the gunsmiths have to prove their professional aptitudes and justify the origin of their financial means. [...]
[...] It has been determined to set high common standards which should be regarded as the minimum for the management of, and restraint in, conventional arms transfers by all EU Member States, and to strengthen the exchange of relevant information with a view to achieving greater transparency, to prevent the export of equipment which might be used for internal repression or international aggression, or contribute to regional instability. Thanks to this code, already 33 countries are sharing the same methods to analyze dossiers on arms. [...]
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