The White & Case International Trade and Commodity Finance Group is composed of lawyers from the Firm's offices around the world. Our clients are financial institutions, commodity producers, trading companies and governments. As legal advisors, we provide assistance in:

• structuring and documenting commodity-linked financing transactions;
• risk management in credit, trading and commodity-related investment transactions; and
• dispute resolution and recovery.

Growing Demand for International Trade and Commodity Finance Facilities: International banks and global business enterprises are increasingly involved in commodity and trade finance and the demand for pre-export financing in particular has grown substantially. The increased demand results in part from the emergence of newly privatized enterprises in former Soviet bloc countries and the concomitant need for capital to finance industrial development. Demand has also been spurred by the new commodity- and trade-linked financing products that have been developed by international financial institutions to accommodate the risk management objectives of their clients.

Structured commodity trade finance in Eastern and Central Europe, the former Soviet Union, as well as in the traditional commodity-producing regions of Latin America, Africa, the Middle East and Asia is an important area of growth for our banking and corporate clients. In many of these regions, the local banking system is unable to accommodate the needs of producers and refiners for funding increased working capital requirements resulting from industrial development or democratization of the local economy.

In order to accommodate the needs of both the international suppliers of goods and services and local producers, international financial institutions are increasingly providing limited recourse facilities to finance trade in oil, other energy commodities, chemicals, precious and base metals, coffee, cocoa, sugar, grains, edible oils, paper, and textiles and other staple commodities.

Structuring Commodity Trade Finance Transactions and Managing Risk: Legal security and physical control over readily-marketable physical commodities, coupled with appropriate performance risk and commodity price-risk management mechanisms, can provide an effective self-liquidating collateral base for financing facilities to producers and refiners of raw materials.

In recent years, White & Case lawyers have been involved in structuring many of the largest and most complex of these facilities in Africa, Asia, Central and Eastern Europe, the newly independent states of the former Soviet Union, and in Latin America. These transactions continue to evolve and to grow in size, term and sophistication, and involve many dimensions:

• extensive expertise with local laws regarding foreign trade and exchange controls, title to goods and creation of security interests;
• application of political risk and casualty insurance to mitigate credit and performance risk;
• implementation of appropriate collateral control and monitoring procedures; and
• use of commodity price risk management techniques appropriate to the circumstances of the transaction.

White & Case has advised financial institutions and large commodity producers as well as government agencies in origin countries in the development of commodity pre-export finance facilities.

All commodity financing transactions require some level of price risk management to offset commodity value fluctuations. Some commodity-linked financing facilities are designed to enable a borrower to fix both interest rate and commodity price exposure. At the same time, commodity financing transactions often take place in countries in which there is significant political and performance risk.

Our lawyers are regularly called upon to advise financial institutions as to the most appropriate means available, within the limitations of applicable local laws, of managing commodity price risk, securing title to physical commodities and to export sale proceeds, and offsetting political and performance risk through the use of cargo and political risk insurance and escrow accounts.

Dispute Resolution and Recoveries: Structured commodity finance transactions inevitably require detailed consideration of local laws relating to title and security interests to goods and assignment of sales proceeds, regulations governing foreign trade and exchange controls, and the enforcement of rights and remedies available to protect our clients' interests in local courts and arbitration tribunals.

White & Case lawyers are experienced in handling disputes in the courts and arbitration tribunals in many countries throughout the world. In addition to commercial disputes, we have represented the interests of financial institutions and governments in many of the major international sovereign debt restructurings.