Printer Friendly

Contents

Contents Page.....................................................................................................2

Introduction to export contracts and payments .............................................4

Export sales contracts .......................................................................................5

Trade terms and Incoterms ..................................................................  .........6

Differing distributions of responsibility, cost and risk............... .... .............7

Methods of receiving payment for exports ..................................... ...............9

Advance payment................................................................................ .............10

Open account trading ........................................................................... ..........11

Collections ........................................................................................................12

Clean collection ...............................................................................................13

Documents against acceptance (D/A).........................................................14

Documents against payment (D/P) .............................................................15

Documentary credits........................................................................................17

UCP: Uniform customs and practice for documentary Credits ..............19

Revocable and irrevocable credits ...............................................................20

Confirmed and unconfirmed credits ............................................... ............21

With and without recourse .............................................................................22

Transferable Credits .......................................................................................23

The exporter as first beneficiary ....................................................................24

The exporter as second beneficiary .............................................................25

Back-to-back Credits .......................................................................................26

Advance payment (“red clause”) Credits......................................................27

Revolving Credits..............................................................................................28

Evergreen Credits.............................................................................................29

Standby Credits ................................................................................................30

Clean Credits ....................................................................................................31

Credits financed by international agencies ................................. ...............32

Inoperative Credits ...........................................................................................33

Payment under Credits.....................................................................................34

At sight or deferred ............................................................................................35

Acceptance and negotiation ............................................................................36

Discounting and purchasing term bills..........................................................37

Confirmation and silent confirmation .............................................................38

Assignment of proceeds ...................................................................................39

Coping with exchange rates .............................................................................40

Export finance options ........................................................................................41

Pre-shipment finance..........................................................................................42

Red clause Credits (Advance payment Credits) ...........................................43

Revolving Credits.................................................................................................44

Formal lending facilities .....................................................................................45

Banks......................................................................................................................46

ECGD supplier insurance ..................................................................................47

Finance against collections ...............................................................................48

Finance against collections without insurance cover ..................................49

Finance against collections with insurance cover ........................................50

Credit insurance...................................................................................................51

Factoring, discounting, aval and forfaiting.......................................................52

Factoring................................................................................................................53

Discounting...........................................................................................................54

Aval..........................................................................................................................55

Forfaiting................................................................................................................56

Bankers’ acceptances ........................................................................................57

Confirming houses..............................................................................................58

Problems that compromise payment...................................................... ........59

Banks and their role.............................................................................................60

Avoiding unacceptable Credits..........................................................................62

Common discrepancies that compromise payment ....................................63

Dates.......................................................................................................................64

Bills of Exchange ..................................................................................................65

Invoices....................................................................................................................66

Insurance documents ..........................................................................................67

Transport documents............................................................................................68

Overcoming discrepancies .................................................................................69

Management controls ...........................................................................................70

Working with the Bank...........................................................................................71

Chasing progress..................................................................................................72

Transport documents and control of goods......................................................73

Managing credit insurance ..................................................................................75




In collaboration with