unit3_ esp2_ financing foreign trade.ppt

8/14/2019 unit3_ esp2_ Financing Foreign Trade.ppt

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MISS FOREIGN TR DE


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LOGO

Open account


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LOGO

Characteristic

Open account occurs when aseller ship the good and all the

necessary shipping andcommercial document directlyto a buyer, who agreed to remitpayment of the invoice back to

the seller after receiving thedocuments


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LOGO

Advantages

Saving time for both exporter andimporter

Not much involvement of banks

Safe for importer


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I am not too old !


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Not a clumsy girl !


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I am beautiful

and talent !


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Im also a

rich

princess !


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Miss Documentary Credit


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About myself

Issuing bank

The

beneficiary

Customers

Advisingbank


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Lcs Characteristics

1. Negotiability

LC are often negotiable

To make a LC negotiable: the LC must

include an unconditional promise to pay


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Lcs Characteristics

A revocable LC : may be revoked or modified for anyreasons and can not be confirmed

A irrevocable LC : may not be revoked

without the agreement of the banks and thebuyer

2. Revocability


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Allows the importer to avoid or reduce prepayment

Reduce the risk connected with the seller not meeting

its delivery obligations

Structure the payment plan in the contract

according to the importer's interests

Advantages of LC1. For Importers


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Advantages of LC

Reducing the production risk in case the buyer cancelsor changes his order

The buyer cannot refuse to pay due to a complaint about

the goods

Reduce the risk of non-payment for delivered

goods

2. For Exporters


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LOGO

Bills for collection

Miss. BC


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Clean collectionDocumentary collection

Definition

Types of collections

main information of Bill for collection


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Trade collections

Exporter Overseas buyer

forwarded

the exporters bankin the importers

country

Draw a billofexchange


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DocumentsBanks are

I intermediaries

-

Bills forcollection


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Clean collection

Financial documents

Clean collection

Simple

In favor of importers (delivery and payment areindependent )


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Documentary collection

Documentarycollection

Commercial documents( shipping documents,

document of title,etc)

Financial documents

saferas the importer has to pay in return ofthe documents of title to receive the goods after

all


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ADVANCE PAYMENT

+ The customer sends money first to theexporter.

+ The exporter checks that the money has beenreceived and then sends the goods to the

customer.

+ Being used if there is more demand thansupply for that kind of commodity.


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AP

ADVANTAGES

safest method of payment

for the exporter

time saving


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Comments ofconsultant


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Contests result


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Thank you for your attention!