Lesson 1
International Payment
Generally speaking, it is not very difficult for buyers
and sellers in domestic trade to get to know each other's
financial status and other information, and payment is
likely to be made in a straight forward manner . say by
remittance or by debiting the debtor's account. In international
trade, however , things are far more complicated. Purchase
and sale of goods and services are carried out beyond
national boundaries, which makes it rather difficult for
the parties concerned in the transaction to get adequate
in formation about each other's financial standing and
creditworthiness. Therefore, mutual trust is hard to build.
Both the exporter and the importer face risks as there
is always the possibility that the other party may not
fulfill the contract.
For the exporter there is the risk of buyer default. The
importer might fail to pay in full for the goods. He might
go bankrupt ; his government might, for various reasons,
ban trade with the exporting country or ban imports of
certain commodities; the buyer might run into difficulties
getting the foreign exchange to pay for the goods. It
is even possible that the buyer is not reliable and simply
refuses to pay the agreed amount on various excuses.
On the part of the importer, there is the risk that the
shipment will be delayed, and he might only receive them
long after payment. The delay may be caused by problems
in production or transportation, and such delays may lead
to loss of business''. There is also a risk that wrong
goods', might be sent as a result of negligence of the
exporter or pin-ply because of his lack of integrity.
Polities risks such as war, quotas, foreign exchange control;
commercial risks like market change and exchange rate
fluctuations; and even language barriers all add up to
the problems in international trade. Because of these
problems and risks, exporters are hesitant to release
their goods before receiving payment, while importers
prefer to have control over the goods before parting with
their money
Various methods of payment have been developed to cope
with different situations in international trade. When
the political and economic situation in the importing
country makes payment uncertain or when the buyer's credit
standing is dubious, the exporter may prefer cash in advance
or partial cash in advance11. In this case, the importer
has no guarantee that the exporter will fulfill his obligations
once he has made payment by cash. If the buyer and the
seller know each other well, they may decide to trade
on open account12. This means that no documents are involved
and that legally the buyer can pay anytime. The seller
loses all control over the goods once they have been shipped.
Sales on this basis are usually paid for by periodic payments,
and obviously the exporter must have sufficient financial
strength to carry the cost of the goods'3 until receiving
payment. If the exporter wishes to retain title or ownership
to the goods14, he can enter into consignment transactions13.
This means the exporter has to send his goods abroad and
will not get payment until the goods are sold. If not
sold, the goods can be shipped back. Therefore, this arrangement
should only be made with full understanding of the risks
involved and is preferably to be limited to stable countries
where the exporter has a trusted agent to look after his
interest.
A lot of international transactions are paid for by means
of the draft, which , also referred to as the bill of
exchange , is an unconditional order TO a bank or a customer
to pay a sum of money to someone on demand or at a fixed
time in the future. The person who draws the draft, usually
the exporter, is called the drawer, and the person to
whom the draft is drawn is called the drawee. There is
yet another party the payee, i. e. the person receiving
the payment, who and the drawer are generally but not
necessarily the same person, as the drawer can instruct
the drawee either to pay "to the order of ourselves"
or to the order of someone else, for instance, the bank.
A draft is either a sight draft or a usance draft (also
called tenor draft or term draft). The former calls for
immediate payment on presentation to the drawee while
the latter is payable at a later date, e. g. 30, 45, 60,
or 90 days after sight or date. A draft is either clean
(without documents) or documentary. In the latter case,
the draft is accompanied by the relevant documents such
as the bill of lading, the invoice, the insurance policy
etc.
In documentary collection, the exporter sends the draft
and the shipping documents representing title to the goods20
to his bank, which forwards them to another bank in the
importer's country, which in turn contacts the customer.
In the case of documents against payment (D/P)21, documents
will not be released to the importer until payment is
effected. There are D/P at sight and D/P after sight.
The former requires immediate payment by the importer
to get hold of the documents. The latter gives the importer
a certain period after presentation of the documents,
but documents are not released to him until he actually
pays for the merchandise. In the case of documents against
acceptance (D/A)22, documents are handed over to the importer
upon his acceptance of the bill of exchange drawn by the
exporter. Payment will not be made until a later date.
D/A is always after sight.
So far as the exporter's interest is concerned , D/P at
sight is more favourable than D/P after sight, and D/P
is more favourable than D/A. In actual trade, payment
by collection should be accepted with discretion. It is
usually used when the financial standing of the importer
is sound, or when the exporter wishes to push the sale
of his goods, or when the transaction involves only a
small quantity. Otherwise, the letter of credit is generally
preferred.
Words and Expressions
domestic a. 国内的
status n. 状况
remittance n. 汇款
debtor n. 债务人
debit vt. 将….记入借方
n. 借方；记入借方的款
credit worthiness 资信可靠状况
default n. 违约；不履行职责
ban v. /n. 禁止
fluctuation n. 波动
hesitant n. 犹豫；不情愿
dubious a. 可疑
periodic payments 分阶段付款
draft n. 汇票
bill of exchanp.e 汇票
drawer n. 出票人
drawee n. 受票人
payee n. 受款人
usance draft (tenor draft, term draft) 远期汇票
documentary draft 跟单汇票
clean draft 光票
Bill of lading 提单
Title of the goods 货物所有权
Invoice n. 发票
Insurance policy 保险单
Documentary collection 跟单托收
Documents against payment (D/P) 付款交单
Documents against acceptance (D/A) 承兑交单
Sound a. 健全；良好
With discretion 慎重地；审慎地 |
� Robots �