Recovery

Recovery in foreign trade typically refers to the act by one party (such as an exporter, insurance company, or bank) to recover funds from the party actually liable after having paid out or borne a loss. It is common in export credit insurance, factoring, letter of credit disputes, and marine cargo damage. For example, after an exporter insures against credit risk and the importer goes bankrupt, the insurance company pays the claim and obtains subrogation rights to recover from the importer or its guarantor. Note: the right of recovery is usually based on law or contract (e.g., subrogation) and must be exercised within the limitation period; the target of recovery may include the buyer, carrier, insurer, etc. Unlike a 'claim,' which is a demand for compensation by the injured party against the liable party, recovery is the already-compensated party turning to the ultimately liable party to recoup losses. Compared with 'debt collection,' recovery emphasizes legal subrogation or transfer of rights and is often used in insurance and guarantee contexts. Foreign trade practitioners should retain complete transaction and payment documents to ensure sufficient basis for recovery.