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The agent doesn't accept foreign exchange for exports. Can I terminate the cooperation with them?
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Our company exports goods through an agency, but the other party has been delaying the receipt of foreign exchange, which has prevented us from verifying and refunding the tax. The contract was signed for three years, but it has only been implemented for half a year so far. Can we unilaterally terminate the cooperation? What responsibilities will we need to bear?
Victor SunYears of service：5Customer Rating：5.0
Trade Risk Control ManagerStart a Chat
From a compliance perspective，whether you can terminate the cooperation depends on the contract terms and foreign exchange management regulations. First，review the contract provisions regarding the payment period and termination conditions. If the contract explicitly stipulates that the agent should receive the payment within a specific period and failure to do so constitutes a breach of contract，you have the right to terminate the contract in accordance with Article 563 of the Civil Code. Secondly，according to the regulations of the State Administration of Foreign Exchange，export proceeds must be received and cleared within 210 days from the export date，otherwise it may affect tax refunds. If the agent delays payment without a valid reason，it constitutes a material breach of contract. However，it is important to note that unilateral termination requires written notice and preservation of evidence，otherwise you may bear breach of contract liability. It is recommended to first send a lawyer's letter to remind them，and if the other party still fails to perform，you can then exercise the right to terminate the contract.
Linda GaoYears of service：7Customer Rating：5.0
Documentation SupervisorStart a Chat
From the perspective of logistics and customs clearance practices, you need to handle this situation in two different ways. If the goods have already been exported but the foreign exchange has not been received, the top priority is to control the bills of lading and customs clearance documents to prevent the loss of ownership of the goods. Immediately contact the freight forwarder to suspend the release of the documents, and verify whether the agent has declared the goods in your name and who the consignor and consignee are in the customs data. If the goods have not yet been exported, it is recommended to immediately stop booking shipping space and replace the exporting entity. Additionally, the exported goods involve tax rebate documents. If the agent does not receive the foreign exchange, you will be unable to apply for tax rebates, and this loss must be quantified. Before terminating the cooperation, it is essential to obtain copies of all logistics documents, customs declarations, and bills of lading, otherwise subsequent customs clearance and tax issues will become more troublesome.
Grace WangYears of service：10Customer Rating：5.0
Senior Foreign Trade ConsultantStart a Chat
From the perspective of business negotiations, it is not recommended that you directly confront the other party and unilaterally terminate the contract, as this will put you at a disadvantage in subsequent negotiations. A more prudent strategy is as follows:
1. Send an official business letter expressing concern rather than accusation, such as "Given that the current progress in foreign exchange recovery may affect our long-term cooperation, we hope your company can provide a payment schedule by X date." This approach applies pressure while leaving room for negotiation.
2. If the other party still fails to take action, initiate a "gradual exit" strategy by proposing to "suspend new business cooperation and gradually wind down existing operations." This approach is more acceptable than directly terminating the contract.
3. During negotiations, emphasize "damage to mutual interests" rather than accusing the other party of breaching the contract, for example, "If payments remain uncollected for a long time, the tax authorities may audit both of us," thereby aligning the other party with your position.
Finally, ensure that all verbal commitments are formalized in writing, even via email confirmation. This is crucial for protecting your legal rights.