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What Is Trade Credit Discrimination?

"What is credit discrimination (as related to trade credit) and what legal issues do I need to be aware of?"

This question was asked at a recent webinar, now available on-demand:

"Essentials of Working Capital Management: Trade Credit & Collections"

Please add your thoughts about it below. Thanks!

Answers

Ken Parkinson
Title: Managing Director
Company: Treasury Information Services, LLC
(Managing Director, Treasury Information Services, LLC) |

In the U.S., the Robinson-Patman Act (Federal) governs customer discrimination situations. If a server cannot show that customer A is different from customer B (e.g., costs more to complete a shipment), then both customers have to be offered the same terms. There are penalties associated with not adhering. Overseas, transfer pricing laws require that a seller offer the same terms to similar companies, even if those customers are foreign subsidiaries of the parent company. Local representatives usually can advise sellers.

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