Quick Contact

Are you missing valuable credit information on those you deal with?

Find out what information is available. Just complete the form below and we will contact you.




Re-Type Code:

Refer Potential Members

Why should I submit potential members to NACM?

Are you tired of dealing with
credit reference requests?

Direct the requesting company info to NACM. As a member they will have access to our reports. You will get fewer credit reference requests and their information will be added to your NACM reports.

Connect With Us

< back to News
Feb 01 2014
Selling To Native American Tribes
April Tanner, Kimball Equipment Company

Does your company sell to foreign nations? Your company may be taking this risk and not even know it. If you sell to a Native American Tribe -  with or without your knowledge of the tribal ownership of the company, then your company is selling to a Sovereign Nation and the normal credit rules don't apply. The risk - yes risk - your company is exposed to is increased. . . unless you are prepared. 


United States Indians, Canadian Indians and Alaska Natives are considered Native American Tribes by United States and Canadian law. In the United States, the tribes have their own laws.  These laws apply to their land, property, members and legal justice system. The Bureau of Indian Affairs in 2010 recognized over 300 tribes in the United States alone. Tribes ARE NOT normally subject to most United States laws. This fact will impact your business. These impacts will include your company's ability to collect debt owed, repossess rented equipment, the safety of employees doing repairs to tribal owned equipment on tribal land, your company vehicles, and your employees/salespersons who enter tribal lands etc. 


Selling to tribes may also have an impact on your company's relationship with your bank. Many banking rules and loan covenants have specific guidelines about reporting sales to tribes because of the high risk. Your company's insurance policies also may have specific guidelines or regulations about selling to or having company employees or property enter Sovereign Nations Territory. Even our yearly auditors ask about our sales to tribes and how we control risk.


In the past 10 years I have noticed a huge increase in the number of tribes starting up companies and entering the business world. In some cases the tribe has leased their land to private US companies for use - further complicating legal issues. Many tribes are trying to utilize the assets they own in new and better ways to benefit the tribe. Many of these tribes cannot or do not want to solely rely on a casino to fund the tribe. The number of tribes my company sells to directly or indirectly has tripled in the last 10 years. Not all get open account terms, but a lot do. In order to accommodate making these types of sales for my company, I needed to ask . . . "How does a good Credit Manager protect the A/R assets of the company when selling to a tribe?" The answer, DUE DILIGENCE - as always. Due diligence is a must not only before but during a company's relationship with the tribe. The "C's" of credit still apply, but also having the correct paperwork is a vital part of minimizing risk. 


As you can see . . .  selling to tribes is complicated. I am just going to cover the bigger points here. The companies I have worked for in my 25 year credit career have always sold to tribes, some only on CWO or COD terms - using common carrier shipping and some on open account credit terms set forth in the credit application. In any case it is your knowledge and paperwork that will matter most. Here are the vitals my company requires:


1.     Selling to a Tribe requires a different credit application and rental agreement. If we find out after the regular credit application is submitted by a tribe, the correct tribal application will be required and our salesmen are trained to get this paperwork. Our paperwork must be signed by a Tribal Council Member. This signature also binds the tribe to the United States legal system as stated in our application. We require a credit application even when selling on CWO or COD terms if our employees will be required to enter tribal land. Sometimes a personal guarantee will be required. This document also binds the guarantor to US laws. Unless the guarantor owns property off tribal land, it will be hard to enforce a judgment. However, we all know about the old proverb . . . an ounce of prevention . . . (NOTE: My company's legal department won't let me release our tribal documents or I would have included a sample here - Sorry!)

2.    Copy of the Tribal Laws and Charters and or Constitutions. Usually this can be obtained online. This will also contain a list of the Tribal Council Members. READ these documents and understand them.

3.    Flag the account as a Tribal sale. Management, owner and employee knowledge of sales to tribes and understanding the risk involved and the reason for the correct paperwork is a must.   As a result, when a change in the sales relationship occurs, for example, when an account set up for "parts only" suddenly needs a rental, because it is flagged, the departments know what paperwork is needed ahead of time. Flagging the account also informs our insurance companies, bankers, auditors etc. that we are aware of the risks involved in selling to tribes and that precautions have and are being taken.

4.    Do normal credit application processing, references, banking, credit reports, business registration checks and internet searches on the tribe and its members. There are many good websites for this - just do a little checking in a good search engine. After the account is open on credit terms you should have a program like Google Alerts activated on the specific tribe or all tribes. I have found this tool very valuable.

5.    Protect your company's property and your employees. If your company is renting equipment to a tribe, do a UCC. This UCC may or may not be enforceable on tribal land, but it is a legal notification of ownership. Find out if you can enter the tribal land at any time to take back your property for any reason. Are there any special insurance requirements needed from the tribe for the rental of equipment in their tribal bylaws or from your own insurance company? What does the tribal insurance policy cover and how does it work? Does your workers compensation policy cover employees on tribal land? What about your company vehicle insurance - are your vehicles covered on tribal land? What tribal laws govern your employees on tribal land? Again, these answers can often be found in the Tribal Laws and Charters. Sometimes you must ask for these documents to get them because they are not on the tribe web sites - but you can get them.

6.    Continued review. In my company's case, I monitor tribal news all the time with daily reminders from Google and checking national tribal news websites regularly. I also check the specific tribe's web sites from time to time. We review the accounts yearly and require the salespersons for these accounts to monitor and report changes they see and perceive with the customer. Our bankers and insurance companies have been happy with our policies and procedures in dealing with the Tribes and our track record is very good because of our constant review of these accounts.


The ability to collect against tribes with these special forms is still being tested. As in all legal cases, having the correct and proper paperwork does not always mean you will collect the money, but at least you have done your best. I have been monitoring several cases as they work their way through the United States legal system waiting to see the outcome - not much resolution yet.  Some examples of cases in the system are: banks suing tribes, tribes suing tribes (very interesting), states suing tribes and finally creditors - secured and unsecured suing tribes. 


In short, selling to Native American Tribes takes extra effort and time even if only selling CWO or COD.  As with all sales there is risk, but it is a risk that can be managed.  I know this sounds like a lot to do, and it can and will be at first. Once your policies and procedures are in place and you have completed the research on your own company's insurance policies and banking requirements, then most of the work is done. Just think of this work and research as yet another asset added to your list of credit manager skills.