商务英语综合教程课件杜凤秋 ISBN9787810788113 PPT international tradechap.27 international commercial payment1.pptVIP

 Terms of sale are typically arranged between the buyer and seller at the time of the sale. Type of merchandise, the amount of money involved business custom, the credit rating of the buyer, the country of the buyer, whether the buyer is a new or old customer, are items to be considered in establishing the terms of sale. The four basic payment arrangements, (1) letters of credit (2) bills of exchange (3) cash in advance, and (4) open accounts, are discussed here. International Commercial Payment Letter of Credit Bill of Exchange---collection Cash in Advance---remittance Open Account---remittance Letter of Credit Letters of credit shift the buyer’s credit risk to the bank issuing the letter of credit. When a letter of credit is employed, the seller ordinarily can draw a draft against the bank issuing the credit and receive dollars by presenting proper shipping documents. Except for cash in advance, letters of credit afford the greatest degree of protection for the seller. Letter of Credit The procedure for a letter of credit 1. begins with completion of the contract 2. when the buyer goes to a local bank and arranges for the issuance of a letter of credit; 3. the buyer’s bank then notifies its correspondent bank in the seller’s country that the letter has been issued. Letter of Credit 4. after meeting the requirements set forth in the letter of credit. The seller can draw a draft against the credit (in effect, the bank issuing the letter) for payment of the goods. 5. the precise conditions of the letter of credit are detailed in it and usually also require presentation of certain documents with the draft before the correspondent bank will honor it. Letter of Credit The documents usually required are (1) commercial invoice (2) consular invoice when requested (3) bill of lading (4) insurance policy or certificate Types of L/C sight credit usance credit Letter of Credit payment will be tendere