Essay Unit 10 International Payment

Submitted By Eddy-Cooper
Words: 6906
Pages: 28

Learning Objectives
 Understanding the main modes

of payment in international trade  Negotiating terms of payment
 Writing a letter asking for L/C amendments ◆ Warm-up Practice
◆ Listening Task
◆ Speaking Task
◆ Reading Task
◆ Writing Task
◆ Follow-up Practice

We need to discuss some questions about what we are going to learn in this unit. Sure, that’ll help us understand better about what we are required to do.

10.1 Starting Up
1. Work in pairs to work out as many factors as you can that need to be considered in negotiating payments for export sales. For example: ● the importer’s past and present business relationship with the exporter
● the importer’s past payment history and perceived credit worthiness 2. The terms of payment are an important part of the sales contract both sellers and buyers are concerned about. Now store the words and phrases that are associated with payment terms and then explain or describe these terms.

L/C

Payment
Terms

T/T

M/T

D/D

D/P

D/A

3) Discuss the following questions.

1) What are the main contradictions that exist between sellers and buyers in international payment?
2) What are both sellers and buyers concerned about in negotiating payment?
3) What are the commonly used methods of payment in international trade? Can you tell the advantages and disadvantages of each for both sellers and buyers?

Introductory Remarks terms payment are an important part of the sales contract
The _____of seller's ____________
. From the _______ point of view, the best terms would cash be full payment in ______ at the time of sale , while the buyers would prefer to have the goodspayment before making _______ . Importers and exporters are separated from each other by thousands of miles . This an agreement payment adds to the difficulties of coming to ___________on how half way
________should be made . The exporters and importers usually meet letter of credit each other ________and agree to payment byreliable
____________opened by a banker's ________bank
. A letter of credit is a ________guarantee that payment shipping of documents will be made on presentation all the required________________. In guarantee this way , the sellers or exporters receive a _________not only from banker delivery the buyers ora importers, but also from ________that payment will be made on _________of the goods . On the other hand, the buyers or guaranteeare given the _________that the banker will not make importers shipping unless documents payment the _________________ are presented .

Main Modes of Payment in International Trade
I. Remittance
A. Mail Transfer (M/T)
B. Telegraphic Transfer( T/T)
C. Demand Draft (D/D)
II. Collection
A. Clean Bill for Collection
B. Documentary Bill for Collection
1. Document against Payment (D/P)
(1) D/P at sight (2) D/P after sight D/P T/R
2. Document against Acceptance
III. Letter of Credit (L/C)

Understanding Letters of Credit

Do you know that 50% of L/C documents presented to banks are rejected? This costs you dearly, in extra bank charges, your wasted time and the customer dissatisfaction.
Key Contents
• What is a letter of credit?
• Learn the differences between different types of L/Cs and when to use them.
• Discover which are the most usual types of L/C - Sight, Deferred
Payment, Transferable, Standby.

 After the sales contract has been established between the exporter and importer, agreeing to settle the payment by L/C, the applicant (the importer) applies to their bank for a letter of credit in favor of the exporter (beneficiary)
 The issuing bank (opening bank) issues an L/C and forwards it to the advising bank in the exporter’s country.
 The advising bank passes the documentary credit to the beneficiary after verifying the genuineness of the credit.
 On receiving the L/C, the exporter checks the terms and conditions of the credit based on the sales contract. If there is a discrepancy, the beneficiary may have the option to accept it as it stands or to ask the…