Compensation business

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In the economy, trade transactions are referred to as compensation business (or compensation trade ; English counter trade ) in which goods or services do not have to be paid for exclusively with money , but are paid in full or in part with other goods or services in return .

General

The word compensation transaction can be traced back to the real exchange of goods ( Latin compensatio , "offsetting" ). Compensation transactions differ from usual purchase contracts in that the buyer cannot or does not want to pay the purchase price in cash because there is a lack of money or foreign exchange . Compensation transactions are therefore characterized by the fact that economic entities mutually exchange services with one another, regardless of whether there are payment flows or not. They usually occur in foreign trade when importing , because the importer or his state is weak in foreign exchange and the state could even impose a transfer stop if the importer is solvent himself. If exports are to take place anyway, a compensation transaction is possible in addition to the - then particularly risky - foreign trade financing (with export credit insurance ).

history

When there was no money , barter was the only way to buy goods. Traders and farmers exchanged objects or livestock for food or other everyday necessities in order to meet their needs . Already the Old Testament demanded in the 3rd book of Moses that the exchange value of both exchange objects should be approximately the same: “One should neither exchange nor exchange an animal, a good for a bad or a bad for a good. But if someone exchanges one animal for the other, they should both be holy ”( Lev 27.10  EU ). For the ancient Babylonians , there was no great legal difference between buying and trading, because they were viewed as identical legal transactions with the aim of selling goods.

The Romans were also familiar with bartering ( Latin permutatio mercium , "exchange of goods"), because until the introduction of money, only an exchange contract existed on the basis of barter , in which the contracting parties exchanged things with roughly the same exchange value. Cicero understood the "permutatio" to mean sales. According to Iulius Paulus , the exchange later had to give ownership of the item to the recipient for both contracting parties. It was clear to him that when exchanging, it was impossible to differentiate between buyer and seller. In early Roman law , the exchange contract began to be replaced by the purchase contract ( Latin emptio venditio ; literally: "purchase / sale"). The high-class lawyer of the 2nd century, Gaius , demanded in his institutions that the purchase price had to exist “in sounding money”; the exchange contract was now considered outdated. Since then, the previous exchange value has been replaced by the more objective monetary value . But the lack of money, which began under Augustus , kept the barter contract alive. The Greeks obtained wine by devoting bronze, iron, skins and slaves.

In the early Middle Ages, bartering continued to predominate, goods changed hands without money being paid for them. The Middle High German word “tûsch” (“fun, mockery, deception, fraud”) first established itself in 1172 in Priest Wernher's “Three Songs of the Maid” (“Driu liet from the maget”). The middle-high word already indicated that when exchanging, one can be deceived or deceived by differently assessed exchange values. In the Middle Ages, barter transactions in addition to sales contracts remained common despite the available money. It happened that within Germany, double customs duties were charged for exchange transactions. The exchange of land was also common, in this way land neighbors pursued private land consolidation .

The General Prussian Land Law (APL) of June 1794 named the two exchange counterparties buyer and seller (I 11, § 364 APL) and gave both of them the option of "withdrawing from the exchange" if the exchange value was unequal (I 11, § 365 APL ). The Austrian ABGB of January 1812 defined the exchange as a contract, "whereby one thing is surrendered for another thing" ( § 1045 ABGB).

The payment transaction regulations laid down in state treaties (“clearing agreements”) formed the basis for Swiss economic relations with the Axis powers in both the prewar and the war years of the Second World War . The global economic crisis resulted in 1929 in the Central and Eastern European countries to a dramatic shortage of gold and foreign exchange reserves. The governments of Germany and Italy adopted rigorous payment and trade restrictions, which also severely impaired foreign trade relations with Switzerland. To protect the export industry and tourism, the Swiss government concluded clearing agreements with Germany in 1934 and with Italy in 1935, which ensured bilateral trade with almost no real foreign currency exchanged. Even if the agreements were officially called clearing agreements, they were compensation transactions because around 20% of the volume had to be paid for in foreign currency.

The East Committee of the German Economy , founded in October 1952, promoted trade with Eastern Europe. The so-called "Eastern trade" had to take into account the weak exchange rates of the Eastern COMECON members, so that compensation transactions represented the most important transactions between German exporters and the Eastern Bloc. The German-Soviet tube natural gas business since February 1970 went back to him, a barter who exchanged large German tubes and bank loans for Soviet natural gas deliveries. From 1976 onwards, due to the drastic rise in green coffee prices, there was a coffee crisis in the GDR , which could only be partially resolved through barter deals with “armaments for coffee”, for example with Ethiopia. In the meantime, France expanded its nuclear power ( French Force de frappe ) from 1974 by importing uranium from the Central African Republic in exchange for weapons.

Even today, developing countries with weak foreign currencies are usually the only option to export their raw materials by importing finished products from the industrialized countries in return . Even if market power is exploited , the developing countries usually fail to improve the terms of trade in their favor.

species

A distinction is made between the following types:

  • Barter trade ( English barter trade ) are various forms of barter trade in goods through moneyless clearing systems or complementary payment systems.
  • Compensation transactions :
    • In the full compensation ( English full compensation ), the flow of goods same value terms completely.
    • In the partial compensation ( English partial compensation ) is a part of the delivery of goods by payment of the balance balanced.
  • Countertrades ( English counter purchase ) is a coupling of the contract , wherein the export transaction is coupled to an import business, by a master contract are interconnected.
    • Parallel transactions ( English parallel barter ) consist of two reciprocal sales contracts concluded at the same time, with each individual purchase price being paid, which is why neither of the contracting parties can record an inflow of money.
    • Junktimgeschäfte ( English advance purchase ) are characterized by an annular barter between three or more countries. The exporter delivers goods to an importer for foreign exchange . However, the exporter must enter into a purchase obligation for goods from the importer as a tied transaction, which the exporter sells to another importer if there is no demand.
    • In support transactions ( English offset compensation ) must exporter specific requirements of the importer state satisfy, such as the allocation of requests to suppliers in the importer state.
  • When repurchase business ( English buy back trade ) with a supplied are complex manufactured products purchased by the equipment suppliers.

All species have in common that they represent cross-border foreign trade and result in little or no purchase price payments.

Compensation transactions in foreign trade

Compensation transactions are often carried out in foreign trade in order to avoid foreign exchange problems and not to burden the foreign exchange balance of the importing country. If compensation transactions are agreed through trade agreements between states, it is a switch transaction. For the individual importer and exporter, these exchange transactions are not necessarily linked to one another, so that an importer will not necessarily have a business relationship with the same exporter when he exports .

Compensation transactions for securities

A typical case of company acquisitions is the share swap , in which the contracting parties exchange their own shares instead of a purchase price.

A compensation transaction also exists if credit institutions in the securities business as commission agents execute buy and sell orders on the same bank working day through self-entry in accordance with Section 400 HGB without engaging a securities exchange.

Offsetting deals for climate protection

In offsetting transactions for climate protection, the greenhouse gas emissions caused by certain activities are to be offset again by savings in greenhouse gas emissions or storage in carbon sinks elsewhere. The total greenhouse gas emissions remain the same. Climate compensation makes it possible to offset emissions that are difficult and costly to avoid by financing more cost-effective measures elsewhere. Overall, however, it does not reduce emissions and is therefore often viewed as a subordinate instrument of climate protection compared to avoiding emissions.

Demarcation

At times, barter deals are viewed as synonymous with barter deals. Barter, however, always presupposes that no cash payment - not even as a partial payment - is made in return .

Foreign economic importance

Compensation transactions do not require any cash payment from the importer, so that he can preserve his liquidity and thereby also not burden the foreign exchange balance of the importing country. That is the real purpose of these businesses. Theoretically, offsetting transactions could contribute to the level of import prices falling while the export price level rises at the same time. In reality, however, the small share of developing countries in world trade results in a very limited influence on the terms of trade . In any case, the compensation trade contributes to export promotion and development aid , circumvents foreign exchange restrictions and helps in opening up foreign markets.

See also

Individual evidence

  1. ↑ Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Internationale Wirtschaft , 2013, p. 240 f.
  2. ↑ Mariano San Nicolò, The Final Clauses of the Old Babylonian Purchase and Exchange Contracts , 1974, p. 109
  3. ^ Gaius, Institutiones , 2, 4, 2
  4. ↑ Iulius Paulus, Digest , 19, 4, 1
  5. ^ Gaius, Institutions , 3, 139-141
  6. ^ Karl Friedrich Thormann, Der doppelte Ursprung der Mancipatio , 1969, p. 125
  7. ^ Gaius, Digest , 3, 141
  8. ↑ Neil Grant, Das Mittelalter , 2006, p. 27
  9. ↑ Ulrike Köbler, Werden, Wandel und Wesen des German private law vocabulary , 2010, p. 245
  10. ↑ Dietrich Denecke / Helga-Maria Kühn (eds.), Göttingen: From the beginnings to the end of the Thirty Years War , Volume I, 1987, p. 423
  11. ^ Christian Friedrich Koch, General Land Law for the Prussian States , Volume 1, Issue 1, 1852, p. 684
  12. ^ Stefan Frech, Clearing. Payment transactions between Switzerland and the Axis powers , in: Independent Expert Commission Switzerland, Volume 3, 2001, p. 2 ff.
  13. ^ Stefan Frech, Clearing. Payment transactions between Switzerland and the Axis powers , in: Independent Expert Commission Switzerland, Volume 3, 2001, p. 2 ff.
  14. ↑ Annette Weber / Markus Kaim, The Central African Republic in the Crisis , in: Stiftung Wissenschaft und Politik Aktuell 10 of March 10, 2014, p. 5
  15. ↑ Axel J. Halbach / Rigmar Osterkamp, The role of barter for developing countries , 1988, p. 117
  16. ↑ Franz-Lothar Altmann / Hermann Clement, Compensation as an Instrument in East-West Trade , 1979, p. 26
  17. ↑ Clemens Büter, Foreign Trade: Basics of International Trade Relations , 2017, p. 92
  18. ↑ Falko Schuster, Counter and compensation transactions as marketing instruments in the capital goods sector , 1979, p. 33
  19. ↑ Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Internationale Wirtschaft , 2013, p. 241
  20. ↑ Erich Hoorn, Eastern exports are often bought at a high price , in: Die Presse of November 7, 1972, p. 7
  21. ↑ Falko Schuster, Counter and Compensation Deals as Marketing Instruments in the Capital Goods Sector , 1979, p. 57
  22. ↑ Otto Hintner, Wertpapierbörsen , 1961, p. 39
  23. ↑ Rudolf Sachs, Guide to Foreign Trade , 1990, p. 41
  24. ↑ Donna U. Vogt, Barter of Agriculture Commodities among Developing Countries , in: BS Fisher / KM Harte (Eds.), Barter in the World Economy, 1985, p. 123
  25. ^ Gary Banks, The Economics and Politics of Countertrade , 1983, pp. 168 ff.
  26. ↑ Clemens Büter, Foreign Trade: Basics of International Trade Relations , 2017, p. 96