Choosing Cross-Border Financial Guarantee Instruments—Economic Implications and Hidden Risks

Abstract

Governments have put in place instruments to control the transit of goods and ensure that national regulatory frameworks are followed by transport companies, in particular to ensure revenue collection and reduce security risks, e.g., violation of import/export restrictions, money laundering, evasion of local taxes or duties, etc. Nevertheless, many of these instruments are known to bring additional burdens to companies. In this chapter, these burdens are analyzed under the form of financial and operational risks. The results, based on a case study of intermodal transport (road and sea) performed across five countries in the BSEC region (Serbia, Bulgaria, Turkey, Georgia, and Azerbaijan), show which cross-border financial instruments could be more convenient for companies. In addition, the study highlights the presence of hidden risks that should be considered when choosing among available options. ; QC 20190304