（高职）Chapter 7：《外贸英语》ppt课件.pptx

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1、（高职）Chapter 7：外贸英语ppt课件外贸英语外贸英语目录CONTENT010302040709081011050612 Bill of exchange Promissory note Check Remittance Collection Documents against Payment（D/P） Documents against acceptance（D/A） Letter of credit（L/C）1.identify three instruments of payment. 2.describe the types of remittance.3.describe t

2、he workflow of collection and the letter of credit.4.understand different types of collection.5.describe the features of L/C.6.list main kinds of L/C.7.describe the main contents of L/C.NegativePositiveKey termsKey termsObjectivesObjectives is an important part during the period of fulfilling the in

3、ternational trade contract.It concerns the profits both of the exporter and the importer.Compared with payment arrangements for domestic transactions，international payment arrangements are much more complicated and difficult.We will mainly discuss instruments of payment，and modes of payment.Instrume

4、nts of payment7 7. .1 1，it is impossible for the seller to deliver the goods and the buyer to make the payment face to face.Usually，the seller delivers the goods and hands over the documents，and the buyer makes payment against documents.are generally used in international trade practice.They are som

5、e documents that have monetary value，such as bills of exchange，checks，promissory notes. They are all used for the payment or transfer of money. Bill of exchange is the most used in practice of them.Instruments of payment7 7. .1 17.1.1Bill of exchange is an unconditional order in writing，signed by th

6、e person（drawer）such as a buyer，and addressed to another person（drawee），typically a bank，requiring the drawee to pay a stated sum of money to another person（payee），often a seller，on demand or at a fixed future time.A bill of exchange is used primarily in international trade. It is commonly referred

7、to as the draft or the bill. And it is most frequently used in the payment against a letter of credit（L/C）. It is also used in the open account without any L/C involved.Instruments of payment7 7. .1 17.1.1Bill of exchangen A bill of exchange must fulfill the following requirementsInstruments of paym

8、ent7 7. .1 17.1.1Bill of exchangen Types of bill of exchangeInstruments of payment7 7. .1 17.1.1Bill of exchange The usage of a bill of exchange includes such stages：Instruments of payment7 7. .1 17.1.2Promissory note is a written note by the maker who promises to pay a specific amount of money at a

9、 specific time to a specific payee or bearer.As a promissory note is a promise by the maker（instead of drawer）to pay to the payee，there are only two parties concerned，the maker and the payee.n Promissory notes can be commercial notes，which are issued by firms，or bank notes，which are made by bank. Th

10、e commercial promissory note can be sight promissory note or time promissory note，but bank promissory note is only the sight one. In international trade，most of promissory notes are drawn by bankers and commercial promissory notes are rarely used. In using the bankers promissory notes，the importer f

11、irst needs to buy the promissory note from a bank，and then send it to the exporter for the settlement of payment.Instruments of payment7 7. .1 17.1.2Promissory note （1）A promissory note is a promise to pay，while a bill of exchange is an order to pay. （2）There are only two parties to a promissory not

12、e，namely the maker and the payee，while there are three parties to a bill of exchange，namely the drawer，the drawee and the payee. （3）The maker is primarily liable on promissory note，while the drawer is primarily liable if it is a sight bill；and acceptor becomes primarily liable if it is a time bill.

13、（4）When issued，a promissory note has an original note only，while a bill of exchange may be either a sole bill or a bill in a set，i.e. a bill drawn with the second of exchange and third of exchange in addition to the original one. Instruments of payment7 7. .1 17.1.3Check is an unconditional order in

14、 writing drawn on a bank signed by the drawer，requiring the bank to pay a certain sum of money to or to the order of a payee or to the bearer at sight. So it is also called “a demand draft drawn on a bank”. n The drawer of a check must be a depositor that keeps an account current in the paying bank

15、not less than the sum carried on the check，or the check will be dishonored when the holder presents it to the paying bank for payment. Modes of payment7 7. .2 2n In international trade practice，it is important for an exporter and an importer to choose the most acceptable mode of payment. The exporte

16、r naturally wants to get paid as soon as possible，while an importer usually prefers to delay payment until he has received or even resold the goods. So they should be familiar with the many payment modes to utilize in different trade situations.are effective in foreign trade. They are remittance，col

17、lection and letter of credit.Modes of payment7 7. .2 27.2.1Remittance means the importer on his own initiative remits money to the exporter through a bank or other ways according to the terms and time stipulated in the contract. Remitterthe importer. Payee or beneficiarythe exporter. The remitting b

18、ankthe bank in importers place. The paying bankthe bank in exporters place.Modes of payment7 7. .2 27.2.1Remittance There are three kinds of remittance：Mail Transfer Mail Transfer 1Telegraphic Telegraphic TransferTransfer2Demand DraftDemand Draft（D/DD/D）remittance by remittance by bankers demand ban

19、kers demand draftdraft3Modes of payment7 7. .2 27.2.2Collection process is governed by a set of rules，published by the International Chamber of Commerce called Uniform Rules for Collections（URC522）. n Collection is a payment arrangement by the use of drafts. In this method，the exporter draws a bill

20、of exchange on the importer for the sum due after the delivery of the goods，with or without relevant shipping documents attached，and asks his bank to arrange for the acceptance or payment of the bill abroad.The bank will carry out his instructions through its branch or a correspondent bank in the im

21、porters place.Modes of payment7 7. .2 27.2.2CollectionPrincipalPrincipalAThe The remitting remitting bankbankCDraweeDraweeBThe The collecting collecting bankbankDModes of payment7 7. .2 27.2.2Collection There are clean collection and documentary collection used in international trade.（1）Clean collec

22、tion（2）Documentary collectionModes of payment7 7. .2 27.2.2CollectionModes of payment7 7. .2 27.2.3Letter of credit n In international trade practice，the seller undoubtedly，would prefer to be paid in advance. The buyer，on the other hand，would prefer to take delivery of the goods before paying. If th

23、e market is favorable to the seller，remittance is usually used；if the market is favorable to the buyer，collection is adopted. But today none of these terms are used very often. Thats because both the seller and buyer distrust each other. In order to avoid this，contracting parties use a “letter of cr

24、edit”. removes the obstacles in international trade where importers and exporters do not trust each other，and it provides financing for both the importers and exporters.Combination of different modes of payment7 7. .3 37.3.1Combination of L/C and remittance n Payment effected in this way is partly d

25、one by L/C and partly by remittance. If the remittance is made before the shipment of the goods，the money is taken as front money or advanced payment. If it is done after the shipment of the goods，it is often used for the balance of the payment for the consignment，which can be varied in amount.Combi

26、nation of different modes of payment7 7. .3 37.3.2Combination of L/C and collectionn In this way the buyer should open an L/C for a certain percentage of the whole amount value of the goods，and the balance is to be collected. The contract should be declared clearly that the amount of payment under L

27、/C would be available against a clean draft，while the balance of the payment would be available against documentary draft on collection basis. The shipping documents will not be released to the buyer unless he has effected all the payment.Combination of different modes of payment7 7. .3 37.3.3Combin

28、ation of documentary collection and standby L/Cn In order to avoid risks in documentary collection，the exporter can ask the importer to open a standby L/C. Once the payment has been dishonored by the buyer，the exporter can demand the issuing bank of the standby L/C to make the payment. The time of v

29、alidity of the standby L/C must be sufficiently long，so that after the payment has been dishonored，the seller has enough time to ask for the issuing bank for the payment.Payment clause in a contract7 7. .4 47.4.1Remittance n The buyer shall pay total amount of the goods in advance by T/T（M/T or D/D）

30、to the seller not later than 15th of June 2018.Payment clause in a contract7 7. .4 47.4.2Collection123Payment clause in a contract7 7. .4 47.4.3Letter of creditThe buyer shall open through a The buyer shall open through a bank acceptable to the seller bank acceptable to the seller an irrevocable sig

31、ht letter of an irrevocable sight letter of credit and the L/C should reach credit and the L/C should reach the seller 45 days before the the seller 45 days before the month of shipmentmonth of shipment，valid for valid for negotiation in China until the negotiation in China until the 15th day after

32、the month of 15th day after the month of shipment.shipment.The buyer shall arrange with The buyer shall arrange with ABC bank for opening an ABC bank for opening an irrevocable banks acceptance irrevocable banks acceptance letter of credit in favor of letter of credit in favor of the seller within 1

33、0 days after the seller within 10 days after receipt of sellers advice. The receipt of sellers advice. The sight letter of credit shall be sight letter of credit shall be available by draftavailable by draft（s s）at 30 at 30 days sight and remain valid for days sight and remain valid for negotiation in China until the negotiation in China until the 15th days after shipment.15th days after shipment.谢 谢 聆 听T H A N K S F O R Y O U R A T T E N T I O N