Edited by Massimo Ferracci

Exporters negotiating contracts for the supply of capital and/or industrial goods, technologies, systems, or the construction of infrastructure are often forced, if they wish to successfully conclude the commercial transaction, to grant the importer payment extensions ranging from six months to twelve, twenty-four months, or even longer.

The foreign importer, on the other hand, cannot afford to purchase one of the goods described above by committing to short-term payment. He or she needs, as is the case in our country and all industrialized countries, to spread the payment as far as possible, paying in installments (usually semi-annually) up to the amount covered, which will be increased by the interest rate calculated on the deferred payment.
The exporter, therefore, must not only find a solution that guarantees short-term payment for the supply, but must also find financing to allow the importer to purchase the goods by paying for them in installments.

The pro soluto discount with the forfaiting technique

Forfaiting (which is actually carried out in London) is a possible solution that meets the needs of both parties, as it allows the exporter to liquidate its credit and the importer to access financing. The transaction involves a discount on credit instruments, whereby the discounting institution (the forfaiter) purchases the aforementioned promissory notes from the exporter, paying them the amount thereof, net of the interest rate calculated for the payment deferral period, commissions, and related expenses. The notes will then be presented for payment at the agreed-upon due dates and reported on the notes.

The discounting operation using the forfaiter technique is carried out "pro soluto" or "without recourse", which means that the forfaiter, in addition to taking over the credit, also assumes the risks associated with non-payment without the possibility of revealing himself (appealing) against the exporter who assigned it to him.

Conditions for the pro soluto discount

Precisely because of the undoubted advantages that flat-rate taxation offers, exporters must consider that the operation must comply with some fundamental requirements:
• the credit must necessarily be incorporated into bills of exchange such as the accepted bill of exchange or, better still, the promissory note;
• the securities must be issued in “hard” currencies: (US dollars, euros, Swiss francs, yen or British pounds) due to the greater liquidity and marketability of these currencies;
• the total amounts of the credit for which the pro soluto discount is requested must, as a rule, be significant, otherwise the discounting institution (forfaiter) will hardly accept them;
• accepted drafts and/or promissory notes must be supported by a corporate or bank guarantee in the form of a guarantee or a separate letter of guarantee.
• the possibility of benefiting from an interest subsidy from Simest if the transaction meets certain requirements for the incentives, such as advance payment of at least 15% of the total value of the supply. The subsidy covers the difference between the discount rate deemed "appropriate" by Simest and the minimum rate applied by the exporter to the importer, as established by the "Consensus."
With the forfaiting technique, the exporter immediately collects its credit by transforming it into an immediate collection, eliminating the active item "accounts receivable" from the balance sheet, eliminating the credit risk and its administrative management.
Great advantage that the exporter does not have any form of reliance.

The only disadvantage is the extreme complexity of the procedure, which requires the utmost attention in every process and leaves no room for error, otherwise the operation itself will be invalidated.

Consulting operations, in particular contractual and corporate consultancy, are subject to verification only if the conditions set out in art. 1, paragraph 2, letter l, of Legislative Decree no. 231/2007 amended by Legislative Decree no. 90/2017 exist, i.e. in cases of
“a specific or determinable activity, aimed at a financial or patrimonial objective that modifies the existing legal situation, to be achieved through a professional service”.