Q1 Book

Q2 What are the stages for the Evaluations of Companies? Elaborate

in detail

Book

Q3 Write a note on the types of the international business in detail

Book
https://efinancemanagement.com/international-financial-
management/international-business

Introduction

International business refers to any type of business activity that crosses national borders. It can
include the exchange of goods, services, and information between different countries. International
business is becoming increasingly important as globalization continues to grow, and businesses look
for new opportunities in emerging markets. In this article, we will discuss the different types of
international business in detail, along with examples.

1. International Trade

International trade involves the exchange of goods and services between different countries. This can
take place through exports and imports, where goods and services are sold to customers in other
countries. International trade is an essential part of the global economy, and it allows businesses to
reach new markets and access new sources of raw materials.

Examples of international trade include:

 A company based in the United States importing textiles from India to sell to customers in
the United States.
 A company based in China exporting electronic goods to Japan for sale to Japanese
consumers.
2. Foreign Direct Investment

Foreign direct investment (FDI) involves a company from one country investing in another country to
establish a new business or acquire an existing one. FDI is a way for companies to expand their
operations into new markets, and it can provide access to new resources, including labor, raw
materials, and technology.

Examples of FDI include:

 A company based in the United States investing in a manufacturing facility in Mexico to

produce goods for the US market.
 A company based in Japan acquiring a technology firm in the United States to gain access to
new technology and expertise.
3. Licensing

Licensing involves a company granting another company the right to use its intellectual property (IP),
such as patents, trademarks, and copyrights, in exchange for a fee or royalty. Licensing allows
companies to expand into new markets without having to invest in a new business or production
facility.

Examples of licensing include:

 A company based in the United States licensing its technology to a company in China to
produce and sell its products in the Chinese market.
 A company based in Japan licensing its brand name to a company in India to produce and
sell products under the Japanese brand name in the Indian market.
4. Franchising

Franchising is a type of licensing where a company grants another company the right to use its
business model, brand name, and operating procedures in exchange for a fee or royalty. Franchising
allows companies to expand rapidly into new markets while maintaining control over their brand and
operations.

Examples of franchising include:

 A fast-food chain based in the United States franchising its brand name and operating
procedures to a company in France to operate its restaurants in the French market.
 A retail chain based in the United Kingdom franchising its brand name and business model
to a company in Australia to operate its stores in the Australian market.
5. Joint Ventures

A joint venture involves two or more companies from different countries coming together to
establish a new business entity. Joint ventures allow companies to pool their resources and expertise
to enter new markets or undertake a new project.

Examples of joint ventures include:

 An automobile company based in the United States forming a joint venture with a company
in China to produce and sell cars in the Chinese market.
 A pharmaceutical company based in France forming a joint venture with a company in Japan
to develop and market a new drug.
6. Strategic Alliances

Strategic alliances involve two or more companies from different countries forming a partnership to
achieve a specific business objective. Strategic alliances allow companies to leverage their respective
strengths and expertise to achieve a shared goal.

Examples of strategic alliances include:

 An airline company based in the United States forming a strategic alliance with a company in
Europe to provide joint flights and services to customers.
 A technology company based in South Korea forming a strategic alliance with a company in
the United States to develop and market a new product.

Conclusion

International business provides opportunities for companies to expand their operations and reach
new markets. By understanding the different types of international business, companies can choose
the best approach for their specific needs and goals. International trade is a popular option for
companies that want to sell goods and services to customers in other countries. Foreign direct
investment is a way for companies to establish a presence in new markets and access new resources.
Licensing and franchising allow companies to expand into new markets without investing in a new
business or production facility. Joint ventures and strategic alliances provide opportunities for
companies to partner with other businesses to achieve shared objectives.

It's essential for companies to do their due diligence and research on the cultural, legal, and
economic differences of the countries they want to do business with. Companies also need to be
aware of trade regulations and restrictions in different countries to avoid potential legal issues. In
addition, it's important for companies to establish effective communication and collaboration
strategies with their partners to ensure successful business relationships.

Overall, international business offers many opportunities for companies to grow and succeed in the
global marketplace. By understanding the different types of international business and their unique
advantages and challenges, companies can make informed decisions and successfully expand into
new markets.

Q4 Definition
 1) Dumping
Dumping is a trade practice in which a company sells goods or services in a foreign
market at a price that is lower than the cost of production. This can lead to unfair
competition and harm domestic industries. Dumping is illegal under international
trade law, and countries can impose anti-dumping duties on imports to protect
their domestic industries.

Here's an example of dumping:

Assume that Company A is a manufacturer of solar panels in China. It sells its solar panels in China
for $100 each, which is the cost of production, plus a reasonable profit margin. Company A decides
to expand its operations and start exporting solar panels to the United States. It offers to sell the
same solar panels to U.S. buyers for $80 each. The U.S. solar panel market is highly competitive, and
this low price allows Company A to gain a significant market share.

However, the U.S. solar panel manufacturers claim that Company A is dumping its solar panels in the
U.S. market, as the price is lower than the cost of production. They argue that this practice is harmful
to their industry and puts them at a competitive disadvantage. The U.S. government investigates and
finds that Company A is indeed selling its solar panels at a price lower than the cost of production,
and imposes anti-dumping duties on the imports.

As a result, the price of the solar panels from Company A increases, making them less competitive in
the U.S. market. The U.S. solar panel manufacturers benefit from the anti-dumping duties, as they
can now compete on a level playing field.

In conclusion, dumping can harm domestic industries and is illegal under international trade law.
Countries can impose anti-dumping duties on imports to protect their industries and ensure fair
competition

One real-life example of dumping occurred in the 1990s when Japan and
South Korea were accused of dumping steel products in the US market.

In the early 1990s, the US steel industry was struggling due to foreign
competition, particularly from Japan and South Korea. The US government
investigated and found that Japanese and Korean steel companies were
selling their products in the US market at prices significantly lower than their
cost of production, thereby dumping them.
As a result, the US government imposed anti-dumping duties on steel imports
from Japan and South Korea. These duties made the imported steel products
more expensive and helped protect the US steel industry from unfair
competition.

This led to a major trade dispute between the US and Japan and South Korea,
with Japan and South Korea arguing that they were not engaging in dumping
but simply taking advantage of economies of scale in their production.
However, the US government argued that dumping was harming the US steel
industry and that anti-dumping duties were necessary to level the playing
field.

In response, Japan and South Korea filed complaints with the World Trade
Organization (WTO) against the US, alleging that the anti-dumping duties
were unfair and violated international trade rules. The WTO eventually ruled in
favor of Japan and South Korea, and the US had to adjust its anti-dumping
duties to comply with international trade law.

This example highlights the complex nature of international trade and the
importance of following fair trade practices to avoid trade disputes.

2) Pre-Emptive Buying.

Pre-emptive buying is a strategy in which a company acquires a resource or

asset to prevent a competitor from acquiring it first. This can give the
company a competitive advantage by blocking a competitor's access to a
critical resource or asset.

Here's an example of pre-emptive buying:

Assume that Company A is a leading manufacturer of mobile phones, and it

relies on a particular type of processor chip that is in high demand. However,
there is a limited supply of these processor chips, and Company A is
concerned that its main competitor, Company B, will acquire all available chips
and gain a competitive advantage.

To prevent this from happening, Company A engages in pre-emptive buying

and acquires all available supplies of the processor chip. This gives Company A
an advantage over Company B, as it can continue to manufacture mobile
phones while its competitor may struggle to obtain the necessary resources.

Another example of pre-emptive buying occurred in the 1990s when PepsiCo

acquired Tropicana, a leading orange juice brand. At the time, Coca-Cola was
considering entering the orange juice market, and Tropicana was seen as a
potential acquisition target. To prevent Coca-Cola from acquiring Tropicana
and entering the market, PepsiCo engaged in pre-emptive buying and
acquired the brand itself.

This strategy allowed PepsiCo to gain a competitive advantage in the orange

juice market and block a potential entry by Coca-Cola. It also allowed PepsiCo
to diversify its product portfolio and strengthen its position in the beverage
industry.

In conclusion, pre-emptive buying is a strategy used by companies to gain a

competitive advantage by acquiring critical resources or assets before their
competitors. This can help block a competitor's access to important resources
and give the company an advantage in the market.

Quotas and Licenses.

Quotas and licenses are two trade restrictions that governments use to limit imports of goods into
their countries. Both quotas and licenses restrict the quantity of imports that can enter a country, but
they differ in their application and implementation.

Assume that the government of Country A decides to limit the import of shoes from Country B to
protect its domestic shoe industry. The government has two options: a quota or a license.

Quota: A quota restricts the quantity of goods that can be imported into a country. The government
of Country A sets a quota of 100,000 pairs of shoes per year from Country B. Any shoes above this
quota cannot be imported into Country A. This means that Country B can only export up to 100,000
pairs of shoes to Country A in a year.

License: A license is a permit granted by the government that allows a company to import a certain
quantity of goods into the country. The government of Country A issues licenses to companies that
want to import shoes from Country B. The government only issues a limited number of licenses, and
each license specifies the quantity of shoes that can be imported.

State Trading
State trading is a practice in which a government or a government-controlled entity directly
engages in the purchase, sale, or distribution of goods or services. It is commonly used in the
agriculture and energy sectors to control the supply, price, and quality of essential goods

Boycotts
Boycotts are a form of protest in which individuals or groups refuse to buy, use, or support a
particular product, service, or country in response to a perceived injustice or wrongdoing.
Boycotts can have significant economic and political impacts, and they are often used to promote
social and environmental causes.

Embargoes
Embargoes refer to the prohibition or restriction of trade by one country on another country,
typically for political or economic reasons. Embargoes can take different forms, such as trade
restrictions, export controls, import bans, or financial sanctions, and they are often used as a means
of exerting economic or political pressure on a particular country or government.

Here's an example of an embargo:

In 2014, the United States and the European Union imposed economic sanctions on Russia following
its annexation of Crimea. The sanctions included trade restrictions, financial sanctions, and travel
bans on Russian officials and businesses associated with the government. The goal of the embargo
was to pressure Russia to reverse its actions in Crimea and to respect Ukraine's territorial integrity.

The embargo had significant economic impacts on both Russia and the Western countries. Russia,
which heavily relies on oil and gas exports, saw its economy shrink and its currency devalue as a
result of the sanctions. Many Western companies that had operations or investments in Russia also
suffered from the embargo, as they faced restrictions on trade and finance.

Embargoes can have both positive and negative effects. On one hand, they can be a powerful tool
for influencing the behavior of a particular country or government, and can be used to address issues
such as human rights abuses, nuclear proliferation, or terrorism. On the other hand, they can harm
innocent civilians and businesses, and can lead to retaliatory measures and further conflict.
 Q5 Book

Q6 Book

Q7 book and

Advantages:

1. Time-Saving: One of the primary advantages of turnkey projects is that they save time for the client.
Since the contractor is responsible for the entire project, from design to delivery, the client does not
have to spend time coordinating with multiple vendors or overseeing various aspects of the project.
This can be particularly beneficial for clients who have limited resources or expertise in the area of
the project.
2. Cost-Effective: Turnkey projects can also be cost-effective, as the contractor can leverage economies
of scale and reduce costs by buying materials and equipment in bulk. Additionally, since the
contractor is responsible for the entire project, they can ensure that the project is completed within
the agreed-upon budget.
3. Reduced Risk: Another advantage of turnkey projects is that they reduce risk for the client. Since the
contractor is responsible for the entire project, they assume the risk associated with any issues that
may arise during the project. This can be beneficial for clients who do not have the expertise or
experience to manage complex projects.
4. Guaranteed Results: Turnkey projects offer a guarantee of results since the contractor is responsible
for delivering a fully functional product or facility that meets the client's specifications. This can be
particularly beneficial for clients who have high-quality standards or stringent regulations to adhere
to.

Disadvantages:

1. Limited Control: One of the primary disadvantages of turnkey projects is that the client has limited
control over the project. Since the contractor is responsible for the entire project, they may make
decisions that do not align with the client's preferences or objectives. This can lead to dissatisfaction
or conflicts between the client and the contractor.
2. Limited Flexibility: Turnkey projects can also be inflexible, as the client cannot make any changes or
modifications to the product or facility once it is delivered. This can be problematic if the client's
needs or requirements change over time.
3. Lack of Transparency: Turnkey projects may lack transparency, as the client may not have access to
all the details of the project. This can lead to misunderstandings or conflicts between the client and
the contractor.
4. Dependence on the Contractor: Turnkey projects require a high level of dependence on the
contractor. If the contractor fails to deliver the product or facility to the client's satisfaction, the client
may have limited options for recourse.

Example:

A prominent example of a turnkey project is the construction of a power plant. In this scenario, the
contractor designs, builds, and delivers a fully functional power plant to the client. The client can
start using the power plant immediately without any further modifications. The advantages of this
approach include time savings, cost-effectiveness, and reduced risk for the client. The disadvantages
include limited control, limited flexibility, and dependence on the contractor

Q Trading Companies.

A trading company is a business that buys and sells products or services with
the aim of making a profit. These companies act as intermediaries between
manufacturers or producers and customers. They typically source products
from different manufacturers and then sell them to retailers, wholesalers, or
directly to consumers.

Here's an example of how a trading company operates in the real world:

Company: Alibaba Group Holding Limited Industry: E-commerce and

technology Location: Hangzhou, China

Alibaba Group is a well-known trading company that connects buyers and

sellers around the world. The company was founded in 1999 by Jack Ma and
operates through several subsidiaries, including Alibaba.com, Taobao, Tmall,
AliExpress, and Alipay.

Alibaba.com is a B2B platform that connects buyers and suppliers globally. It

offers a range of services such as product sourcing, trade assurance, and
logistics. Taobao is a B2C platform that allows individuals and small businesses
to sell products directly to consumers. Tmall is a B2C platform that enables
established brands to sell their products directly to Chinese consumers.
AliExpress is an online marketplace that sells products to international
consumers. Alipay is an online payment platform that facilitates transactions
on Alibaba's platforms.
Alibaba Group operates as a trading company by connecting buyers and
sellers and earning a commission on each transaction. The company has a vast
network of suppliers and customers, making it one of the largest e-commerce
companies in the world.

Another example of a trading company is Mitsubishi Corporation, a Japanese

multinational trading company that operates in a wide range of industries
such as energy, metals, machinery, chemicals, and food. Mitsubishi
Corporation sources products from different countries and sells them to
customers in Japan and other parts of the world. The company also provides
logistics and financing services to its customers.

Q Export Drop Shipper

An export drop shipper is a type of business that purchases products from

manufacturers or wholesalers and ships them directly to customers in other
countries. The drop shipper doesn't keep any inventory on hand and relies on
the manufacturer or wholesaler to fulfill orders. This type of business is
beneficial for companies that want to expand their reach to other countries
without the expenses of establishing a physical presence in those markets.

Here's an example of how an export drop shipper operates in the real world:

Company: Chinavasion Wholesale Ltd. Industry: Consumer electronics

Location: Shenzhen, China

Chinavasion Wholesale Ltd. is a Chinese company that specializes in exporting

consumer electronics products to customers around the world. The company
operates as an export drop shipper by purchasing products from
manufacturers in China and shipping them directly to customers in other
countries. Chinavasion doesn't keep any inventory on hand and relies on its
suppliers to fulfill orders.
The company has a wide range of products, including smartphones, tablets,
car electronics, home electronics, and security products. It sources products
directly from manufacturers and offers competitive prices to its customers. The
company also provides customer support in multiple languages and offers
worldwide shipping options.

As an export drop shipper, Chinavasion handles the logistics and shipping of

products to customers in other countries. The company takes care of customs
clearance and ensures that the products are shipped safely and efficiently. This
allows the company to expand its reach to other markets without the
expenses of establishing a physical presence in those countries.

Another example of an export drop shipper is Doba, an American company

that specializes in dropshipping products to customers in other countries.
Doba sources products from manufacturers and wholesalers in the United
States and ships them directly to customers around the world. The company
offers a range of products, including electronics, apparel, home goods, and
beauty products. Doba also provides a platform for its customers to manage
their online stores and track their orders.

Q Export/Trading House

An export/trading house is a type of business that acts as an intermediary

between manufacturers or suppliers and international customers. This type of
company is responsible for sourcing products from manufacturers, arranging
logistics, and exporting products to customers in other countries.
Export/trading houses typically specialize in a particular industry or product
category and have a network of suppliers and customers around the world.

Here's an example of how an export/trading house operates in the real world:

Company: Cargill, Incorporated Industry: Agricultural products Location:

Minneapolis, Minnesota, United States
Cargill, Incorporated is a multinational trading company that specializes in
agricultural products. The company operates as an export/trading house by
sourcing products from farmers and suppliers around the world and exporting
them to customers in other countries.

Cargill has a vast network of suppliers and customers and offers a range of
products, including grains, oilseeds, sugar, cocoa, meat, poultry, and seafood.
The company also provides logistics and financing services to its customers
and ensures that products are shipped safely and efficiently.

As an export/trading house, Cargill is responsible for managing the entire

supply chain, from sourcing products to exporting them to customers in other
countries. The company has a deep understanding of international trade
regulations and customs requirements, which allows it to navigate complex
international markets.

Another example of an export/trading house is Louis Dreyfus Company, a

multinational trading company that specializes in agricultural products and
energy. The company operates as an intermediary between farmers, suppliers,
and customers around the world. Louis Dreyfus Company sources products
such as grains, oilseeds, coffee, cotton, and sugar from farmers and suppliers
and exports them to customers in other countries. The company also provides
logistics and financing services to its customers and has a deep understanding
of international trade regulations and customs requirements.
 Q Explain the Role of Agents /Broker in the Port Management elaborate in
detail.

Agents/Brokers play a crucial role in port management. They act as intermediaries between
shipping lines, cargo owners, and the port authorities, facilitating the movement of goods and
vessels in and out of ports. Here are some of the roles of agents/brokers in port management:

1. Ship Agency Services: Agents/brokers provide ship agency services on behalf of shipping lines.
This includes coordinating vessel arrival and departure, arranging for pilotage, tugs, and berth
allocation, and liaising with port authorities to ensure compliance with regulations. They also
handle the necessary paperwork, such as customs and immigration clearance and cargo
documentation.
2. Cargo Handling Services: Agents/brokers arrange for cargo handling services on behalf of cargo
owners. This includes coordinating the movement of cargo from ships to port terminals and
warehouses, arranging for storage, and managing cargo inspections and documentation.
3. Freight Forwarding Services: Agents/brokers act as freight forwarders, arranging for the
transport of cargo from the port to its final destination. This includes coordinating trucking, rail,
and air transportation, arranging for customs clearance, and managing documentation.
4. Chartering Services: Agents/brokers provide chartering services to shipping lines and cargo
owners. This includes arranging for the charter of vessels, negotiating freight rates, and
managing charter parties.
5. Marketing Services: Agents/brokers market port facilities and services to shipping lines and
cargo owners. This includes promoting the port's infrastructure, facilities, and services, and
attracting new customers.
6. Liaising with Port Authorities: Agents/brokers act as intermediaries between shipping lines,
cargo owners, and port authorities. They liaise with port authorities on behalf of their clients to
ensure compliance with regulations, resolve disputes, and coordinate port operations.

In summary, agents/brokers play a critical role in port management by providing a range of

services that facilitate the movement of goods and vessels in and out of ports. They act as
intermediaries between shipping lines, cargo owners, and port authorities, coordinating port
operations, managing documentation, and ensuring compliance with regulations. Their services
are essential to the efficient and effective management of ports and the global supply chain.
Q FCA

FCA (Free Carrier) is an international trade term that defines the obligations, costs, and risks
associated with the delivery of goods from the seller to the buyer. FCA is commonly used in
international trade transactions where the seller is responsible for delivering the goods to a
specific place, such as a port, airport, or warehouse, and the buyer is responsible for the further
transport of the goods.

Here's an example of how FCA works in practice:

Company A is a manufacturer of electronics goods based in China, and Company B is a retailer

of electronics goods based in the United States. The companies have agreed to a sales contract
that includes FCA delivery terms.

Under the FCA delivery terms, Company A is responsible for delivering the goods to the named
place, which is the port of Shanghai. Once the goods are delivered to the port of Shanghai, the
risk of loss or damage to the goods transfers from Company A to Company B. Company A is
also responsible for exporting the goods and clearing them for export, including obtaining any
necessary licenses or permits.

Company B is responsible for arranging and paying for the transport of the goods from the port
of Shanghai to the final destination, which is the port of Los Angeles. Company B is also
responsible for any costs associated with importing the goods, including customs duties, taxes,
and other fees.

In this example, the FCA delivery terms define the obligations, costs, and risks associated with
the delivery of the goods from Company A to Company B. Company A is responsible for
delivering the goods to the port of Shanghai and clearing them for export, while Company B is
responsible for arranging and paying for the further transport of the goods and for any costs
associated with importing the goods.

Q CFR
CFR (Cost and Freight) is an international trade term that specifies the
obligations, costs, and risks associated with the delivery of goods from the
seller to the buyer. CFR is commonly used in international trade transactions
where the seller is responsible for arranging and paying for the cost of
transporting the goods to a specific destination port.

Here's an example of how CFR works in practice:

Company A is a manufacturer of steel pipes based in India, and Company B is

a construction company based in the United States. The companies have
agreed to a sales contract that includes CFR delivery terms.

Under the CFR delivery terms, Company A is responsible for delivering the
goods to the named port of destination, which is the port of New York.
Company A is also responsible for arranging and paying for the cost of
transporting the goods from India to the port of New York. This includes the
cost of loading the goods onto the shipping vessel, freight charges, and
insurance.

Once the goods are loaded onto the shipping vessel, the risk of loss or
damage to the goods transfers from Company A to Company B. Company B is
responsible for any costs associated with unloading the goods from the
shipping vessel at the port of New York, including customs duties, taxes, and
other fees.

In this example, the CFR delivery terms define the obligations, costs, and risks
associated with the delivery of the goods from Company A to Company B.
Company A is responsible for arranging and paying for the cost of
transporting the goods to the port of New York, while Company B is
responsible for any costs associated with unloading the goods from the
shipping vessel at the port of New York. The CFR delivery terms provide clarity
for both parties and help to ensure that the transaction proceeds smoothly.
Q CPT

CPT (Carriage Paid To) is an international trade term that specifies the obligations, costs, and
risks associated with the delivery of goods from the seller to the buyer. CPT is commonly used in
international trade transactions where the seller is responsible for delivering the goods to a
specific destination, but is not responsible for arranging or paying for the cost of insurance.

Here's an example of how CPT works in practice:

Company A is a manufacturer of clothing based in China, and Company B is a retailer of

clothing based in the United Kingdom. The companies have agreed to a sales contract that
includes CPT delivery terms.

Under the CPT delivery terms, Company A is responsible for delivering the goods to the named
place of destination, which is the warehouse of Company B in London. Company A is also
responsible for arranging and paying for the cost of transporting the goods from China to the
warehouse of Company B in London.

However, Company A is not responsible for arranging or paying for the cost of insurance for the
goods during transit. This means that once the goods are delivered to the warehouse of Company
B in London, the risk of loss or damage to the goods transfers from Company A to Company B.

In this example, the CPT delivery terms define the obligations, costs, and risks associated with
the delivery of the goods from Company A to Company B. Company A is responsible for
delivering the goods to the warehouse of Company B in London, but is not responsible for
arranging or paying for the cost of insurance. Once the goods are delivered to the warehouse, the
risk of loss or damage to the goods transfers from Company A to Company B.

Q CIF

CIF (Cost, Insurance, and Freight) is an international trade term that specifies the obligations, costs, and risks
associated with the delivery of goods from the seller to the buyer. CIF is commonly used in international trade
transactions where the seller is responsible for arranging and paying for the cost of transporting the goods to a
specific destination port, as well as obtaining insurance to cover the goods during transit.

Here's an example of how CIF works in practice:

Company A is a supplier of coffee beans based in Colombia, and Company B is a coffee roaster based in Italy. The
companies have agreed to a sales contract that includes CIF delivery terms.

Under the CIF delivery terms, Company A is responsible for delivering the goods to the named port of destination,
which is the port of Genoa in Italy. Company A is also responsible for arranging and paying for the cost of
transporting the goods from Colombia to the port of Genoa, as well as obtaining insurance to cover the goods during
transit.

Once the goods are loaded onto the shipping vessel, the risk of loss or damage to the goods transfers from Company
A to Company B. Company B is responsible for any costs associated with unloading the goods from the shipping
vessel at the port of Genoa, including customs duties, taxes, and other fees.

In this example, the CIF delivery terms define the obligations, costs, and risks associated with the delivery of the
goods from Company A to Company B. Company A is responsible for arranging and paying for the cost of
transporting the goods to the port of Genoa, as well as obtaining insurance to cover the goods during transit. Once
the goods are loaded onto the shipping vessel, the risk of loss or damage to the goods transfers from Company A to
Company B. The CIF delivery terms provide clarity for both parties and help to ensure that the transaction proceeds
smoothly.