Unit 10 Terms of Payment.ppt

Unit 10 Terms of Payment Wright Yin Objectives understand the three main methods of payment, esp. L/C know how to urge the establishment of an L/C know how to write an advice of the establishment of an L/c know how to make a request for extending an L/C know how to request the amendment of an L/C Payment Payment plays an important role in the course of business. International payments are financial activities conducted among different countries. Payment in international trade is much more complicated than that in domestic trade. Three Main Methods of Payment Terms of Payment Forms of Remittance汇付形式 Mail Transfer (M/T) 信汇 Telegraphic Transfer (T/T)电汇 Demand Draft (D/D) 票汇 Types of Remittance 汇付种类 Payment in Advance 预付货款 Payment after Arrival of the Goods 货到付款 Cash against Documents (CAD) 凭单付现 Remittance against Documents 凭单付汇 Collection D/P D/P at sight D/P after sight D/A Letter of Credit The most generally used methods of payment in foreign trade Types of credit Basic contents of L/C Settlement Procedures of L/C Basic Contents of a Letter of Credit The L/C has no fixed and unified style, but its basic contents are the same, including the following components: (1) Illustration of the L/C itself, including the L/C’s kind, nature, number, issuing date, validity, basic parties concerned, amount, etc.; (2) Request for the goods, including the goods’ name, quality, quantity, specifications, packing, price, etc.; (3) Request for transport, including the shipment date, shipment place/port and destination place/port, transport method, allowing or prohibiting transshipment or partial shipment etc.; (4) Request for documents, including three kinds of documents as follows: ① Goods documents, including commercial invoice, packing list, certificate of origin, inspection certificate, etc.; ② Transport documents, namely bill of lading; ③ Insurance documents, namely insurance policy. Besides, other documents may be