BE-07Payment).pptVIP

Zhou Ruiqi Chapter Seven International Payments 7.1 Issues In Concern Who will bear the credit risk? In what currency the payment would be made? What are the costs of each method of payment? What might be the political or legal risks? If trust exists, there is no need to use and pay for the bank’s services Determinant Factors of Payment Nature of merchandise Industry norms/practices Distance between buyer and seller Potential currency fluctuation Political economic stability Relationship between buyer and seller International Payment Credit instruments Bill of Exchange/ Draft 汇票 Promissory Note 本票 Check 支票 Terms of payment Remittance 汇付 Collection 托收 Letter of Credit 信用证 International Payment Differences between payment instruments and payment terms payment instruments --- Financial documents which can be used in different manners serving specific paying purpose payment terms --- A series of activities or operations facilitating the movement of funds from one destination to the other 7.2 Paying Instrument :  Draft / Bill of Exchange 汇票 Definition: A draft is an unconditional written order addressed by one person to another, singed by the person giving it, requiring the addressed person to pay at sight or at a fixed future time the sum of money clearly specified, to the payee or to his order. 汇票是由出票人签发的，要求付款人在见票时或在一定期限内，向收款人或持票人无条件支付一定款项的票据。 Three parties concerned A: The drawer Normally the exporter Fill in the content of a bill of exchange and sign his name B: The drawee / payer The party to whom B/E is addressed If sight draft(即期汇票), make payment If time draft（远期汇票）, accept the draft and pay when the amount is due Under L/C – the bank Under collection – the importer C: The payee/beneficiary The party who is supposed to receive the payment usually the exporter or the bank at which the drawer has his account Present B/E to the payer for payment or acceptance Three parties concerned The content of a B/E The words of “Bill of Exchange” or “