Counterpurchase / Parallel Trading

Counterpurchase or Parallel trading involves separate contracts of unrelated goods often involving third parties.  This is where Contractual Agreements for Reciprocal purchases are put in place and the Counterpurchase is made from a list of suitable products.  The value of the counterpurchase can be less than the original export and equal to or greater than that in value.  In practice most agreements are from 10% to 100% of the initial export value.  There are two separate contracts drawn up which are linked through a suitable protocol.  Normally there is “The Right of Assignment” of the counterpurchase obligation which may or may not involve a trading house.  If the latter is the case then discounts have to be negotiated.

There is usually no Technology Transfer involved in Counterpurchase agreements which usually last up to 3 years in duration but can be much shorter.  The choice of suitable Counterpurchase products could be commodities which are traded on the world markets or manufactured products which might have rather less marketability.

We can advise on all the above aspects and/or represent the exporting or host parties to the Counterpurchase Agreement.