文档介绍：Terms of Payment (Part I )
2006,11
Learning Objectives
By studying this unit, you will be able to:
Know the three major modes of payment in international trade
Know how to write the advice of the establishment of L/C
Know how to write a positive answer to the request of payment by D/P
Know how to ask for an easier payment terms and make a relative response
Know how to propose payment by T/T
Master some specific terms and expressions concerning payment
Three basic modes of payment:
Remittance
Collection
Letter of credit
Remittance
Remittance includes Mail Transfer (M/T), Telegraphic Transfer (T/T) and Demand Draft (D/D).
Remittance is often used in payment in advance, cash with order and open account.
Remittance is usually used panies that are trustworthy to each other in former transactions.
Remittance can be used as a kind of preferential treatment offered to the importers.
remitter
(importer)
remitting bank
(importer’s bank)
payee
(exporter)
paying bank
(exporter’s bank)
(1)sign contract
(2) application/ payment
(3)mandate for remittance
cable
draft at sight
(4)advice, payment
Procedure of remittance
remittance
Collection
Collection can be divided into Clean Collection and Documentary Collection.
Documentary Collection : Documents against Payment (D/P) or Documents against Acceptance (D/A).
D/P calls for actual payment against transfer of shipping documents. There are D/P at sight and D/P after sight.
D/A calls for delivery of documents against acceptance of the draft drawn by the exporter. D/A is always after sight.
principal
(exporter)
Remitting bank
(exporter’ bank)
importer
Collecting bank
(importer’s bank)
(1)Sign contract
(2)application,documentary draft
(3)mandate, draft, plete set of documents
(4)presentation
Procedure of collection
(5)acceptance
(6)documents
(7)transfer
(8)payment
collection
exporter
Remitting bank
(exporter’s bank)
importer
Collecting bank
(importer’s bank)
(1)Sign contract
(2)application/draft