Business English

1. Business English By: Grace Xia xiahuiweihai@yahoo.com

2. CHAPTER 6 TERMS OF PAYMENT

3. Part I Introduction I. Mode of Payment M/T cash payment: remittance T/T D/D L/C draft payment Collection

4. II. Currency stable should be hard convertible II. Time of Payment at sight 30days after sight time payment: usually 60days after sight 90days after sight

5. IV. Collection ICC Uniform Rules for Collection (ICC Publication No. 522) ( URC 522) ＊ 1995 Revision in force as of Jan. 1, 1996

6. ＊ Definition of Collection by URC 522 a. “Collection” means the handling by banks of documents as defined in sub-Article (b), in accordance received, in order to: i. obtain payment and/or acceptance, or ii. deliver documents against payment and/or against acceptance, or iii.deliver documents on other terms and conditions b. “Documents” means financial documents and/or commercial documents: i. “Financial documents” means bills of exchange, promissory notes, cheques, or other similar instruments used for obtaining the payment of money; ii. “Commercial documents” means invoice, transport documents, documents of title or other similar documents, or any other documents whatsoever, not being financial documents.

7. ＊ Forms of Collection I) According to whether the commercial documents are enclosed clean collection: means collection of financial documents not accompanied by commercial documents documentary collection:means collection of : i. financial documents accompanied by commercial documents; ii. commercial documents not accompanied by financial documents.

8. II) According to the conditions forwarding the shipping documents documents against payment (D/P): Instruction a principal (shipper) gives to his bank that the documents attached to a draft for collection are delivered to the drawee only against his payment of the draft. documents against acceptance (D/A): Instruction a principal (shipper) gives to his bank that the documents are attached to a time draft for collection and deliverable to the drawee against his acceptance of the draft.

9. ＊ Documentary collection is widely used in the purchase and sale of goods and services in the international markets. Payment on a documentary collection basis requires the the seller to forward collection instructions, appropriate documents and the seller’s draft through the banking system to the buyer’s bank. Banks act as intermediaries, protecting the interest of both parties. Both the buyer and seller assume risk in the transa- ction, since the buyer can refuse to pay for the documents, or the seller can ship unacceptable merchandise.

10. ＊ The parties to a collection I)Principal: who is the party entrusting the handling of a collection to a bank. II)Remitting Bank: which is the bank to which the principal has entrusted the handling of a collection. III) Collecting Bank: which is any bank, other than remitting bank, involved in processing the collection. IV) Presenting Bank: which is the collecting bank making presentation to the drawee. V) Drawee: is the one to whom presentation is to be made in accordance with the collection instruction.

11. ＊ Advantages to importer: ● Less expensive than L/C ● Less processing requirements than L/C ● With time collection, buyer may receive goods and resell before maturity date of draft ＊ Disadvantages to importer: ● Goods shipped may not conform to the goods specified by the buyer ● Seller/ Banks control the shipping documents

12. V. Letter of Credit (L/C) The Uniform Customs and Practice for Documentary Credits (UCP) Is a set of rules on the issuance and use of letters of credit. The UCP is utilized by banks and commercial parties in more than 175 countries. Historically, the commercial parties, particularly banks, have developed the techniques and methods for handling letters of credit in international trade finance. This practice has been standardized by the ICC by publishing the UCP in 1933 and subsequently updating it throughout the years. The ICC has developed the UCP by regular revisions, the current version being the UCP600, which was approved by the Banking Commission of the ICC at its meeting in Paris on 25 October 2006. This latest version, called the UCP600, formally commenced on 1 July 2007.

13. ICC, which was established in 1919, had as its primary objective facilitating the flow of international trade at a time when nationalism and protectionism threatened the easing of world trade. It was in that spirit that the UCP were first introduced – to alleviate the confusion caused by individual countries’ promoting their own national rules on letter of credit practice. The aim was to create a set of contractual rules that would establish uniformity in practice, so that there would be less need to cope with often conflicting national regulations. The universal acceptance of the UCP by practitioners in countries with widely divergent economic and judicial systems is a testament to the rules’ success. UCP 500 (namely UCP 1993 version) UCP 600 (namely UCP 2007 version)

14. ＊ The parties to a L/C a. applicant / opener: means the party on whose request the credit is issued. b. opening / issuing bank: means the bank that issues a credit at the request of an applicant or on its own behalf.  c. advising / notifying bank: means the bank that advises the credit at the request of the issuing bank. d. beneficiary: means the party in whose favor a credit is issued.

15. e. negotiating bank: is the bank purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advanc- ing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to (to be paid by the nominated bank). f. confirming bank: means the bank that adds its confirmation to a credit upon the issuing bank’s authorization or request. g. paying bank: means the bank that makes payment to the beneficiary of a L/ C after presentation to it of documents stipulated in the L/C.

16. ＊ The credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation. Honour (兑付) means: a. to pay at sight if the credit is available by sight payment. b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment. （延期 付款信用证） c. to accept（承兑）a bill of exchange (“draft”) drawn by the beneficiary and pay at maturity if the credit is available by Acceptance（承兑信用证）.

17. ＊ Characteristics of L/C a. Issuing / opening bank has the liability of first pay. An issuing bank is irrevocably bound to honour as of the time it issues the credit. b. L/C is an independent document. A credit by its nature is a separate transaction from the sale or other contract on which it may be based. Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is included in the credit. c. Banks deal with documents, not goods. Banks deal with documents and not with goods, services or performance to which the documents may relate .

18. ＊ Forms of L/C i. According to whether the draft is enclosed the shipping documents documentary credit clean credit ii. According to the issuing bank’s liability irrevocable L/C revocable L/C (Note: Under UCP 600, a credit is irrevocable even if there is no indication to that effect. )

19. iii. According to whether there is another bank to confirm the L/C confirmed L/C unconfirmed L/C iv. According to the time of payment sight credit usance credit

20. v. According to whether the beneficiary can transfer the L/C transferable L/C untransferable L/C vi. Others open negotiation credit negotiation credit restricted negotiation credit

21. IV) Operation importers exporters I) VII) III) IV) V) II) issuing bank notifying bank paying bank VI) negotiating bank VIII)

22. Part II Reading Cables 1. YC17 S/C2930 FLASHLIGHT D/PUNWRKBL RECOMMEND 60DYSL/C PLSREP 2. S/C1194 150 SEWMACHINES DLVRY OVERDUE MUSTSHP BFR31AUG OZWSCNCL CONTR 3. YC12 COTTON PIECEGOODS 10000PCS L/C8088 AMDD PLSSHP ACCSCHDL 4. S/CRG1592 TEASETS 120C/S FOUND BROKEN AIRGCERT REQIMM REPLACEMT

23. 5. S/CRHOH114 L/C9148 ALARMCLOCK RGRT BADWTHR DLAYDSHPMT PLSCBL EXTENSN SHPMT31/7 VLDTY 15/8 6. L/C9189 REDBEANS PLSAMD BYCBL DELETE QLYGTEE CLAUSE STOP INSERT ABT BFRQLY STOP ALW PARTSHPMT STOP INCRE AMT BY10PCT 7. YL/C5890 CALLFOR SANITARY CERT UPTO AA RGLTNS NT ACCORD WZS/C PLSAMDL/C BYCBL

24. COUNTRY CODE: CA CH CN D D F I J NZ G USA AA

25. 8. L/C9365 OWINGTO NODRCT S/S PLSAMDL/C ALW TRSHPMT ATHK 9. YTLX5MAY GDSUNDR S/C4051 ALRDYSHPD S/SMARIA SLGTOMM DOX AIRDTODAY 10. YTLX3APR 10000GR PENCIL GREATWALL BRAND RDYFOR SHPMT PRC WL ADJUSTTO USD8 PERGR UNLESS YL/C REACHGUS BFR20APR 11. YC29 SPORTSHOE INSIST ORGNL PRC/PACKG IF ACPTD PLSCBL SIZE ASSORTMT SHPMTDT

26. PART III Formula Sentences I. Payment Terms 1. 正如我方销售确认书1936号所规定，有关信用证抵达我方 不得晚于11月15日，我们希望你方及时开证。

27. PART III Formula Sentences I. Payment Terms 1. 正如我方销售确认书1936号所规定，有关信用证抵达我方 不得晚于11月15日，我们希望你方及时开证。 C: S/C1936 STPLTDL/C REACHGUS BFR15NOV PLSOPNL/C INTIME 2. 由于所订货物已经备妥待运，请赶快开证，我们将在接到 信用证后立即发运。

28. PART III Formula Sentences I. Payment Terms 1. 正如我方销售确认书1936号所规定，有关信用证抵达我方 不得晚于11月15日，我们希望你方及时开证。 C: S/C1936 STPLTDL/C REACHGUS BFR15NOV PLSOPNL/C INTIME 2. 由于所订货物已经备妥待运，请赶快开证，我们将在接到 信用证后立即发运。 C: GDSRDY FORSHPMT RUSHL/C EFFCTG SHPMT ASA L/CREACHUS

29. 3. 如果接到有关信用证不晚于5月31日，我们可以保证准时 发运。

30. 3. 如果接到有关信用证不晚于5月31日，我们可以保证准时 发运。 C: PUNCTUAL SHPMT ENSURD IFRCVGL/C BFR31MAY 4. 由于我方销售确认书5829号对开信用证规定的时限已过， 我们要求你方立即行动，否则，我们将把货物向别处处理。

31. 3. 如果接到有关信用证不晚于5月31日，我们可以保证准时 发运。 C: PUNCTUAL SHPMT ENSURD IFRCVGL/C BFR31MAY 4. 由于我方销售确认书5829号对开信用证规定的时限已过， 我们要求你方立即行动，否则，我们将把货物向别处处理。 C: S/C5859 ESTMTL/C DLAYD PLSRUSHL/C OZWS DISPOSEGDS ELSEWHR

32. 5. 关于你方订单AC8209号，我们仍就未得到有关的信用证， 由于此订单已是悬而未决相当长的时间，我们要求你方立 即办理此事。

33. 5. 关于你方订单AC8209号，我们仍就未得到有关的信用证， 由于此订单已是悬而未决相当长的时间，我们要求你方立 即办理此事。 C: YRODR AC8209 L/CDLAYD FORLONG ASKGYR IMMATTN 6. 由于你方通常很迅速地结清账款，我们不知道是否有任何特殊理由，为何我们未收到上述账目的支付，已经过期一个月 了。

34. 5. 关于你方订单AC8209号，我们仍就未得到有关的信用证， 由于此订单已是悬而未决相当长的时间，我们要求你方立 即办理此事。 C: YRODR AC8209 L/CDLAYD FORLONG ASKGYR IMMATTN 6. 由于你方通常很迅速地结清账款，我们不知道是否有任何特殊理由，为何我们未收到上述账目的支付，已经过期一个月 了。 C: YRSTTLMT OFTEN PRMPT WHY ABVACCT DLAYD ONEMNTH

35. 7. 关于我们要求结清上述账目的7月15日的函电没有收到任何 答复，我们再一次致电提醒你们此事。

36. 7. 关于我们要求结清上述账目的7月15日的函电没有收到任何 答复，我们再一次致电提醒你们此事。 C: OL15JUL REQG ABVACCT STTLD NOREP AGN REMIND BYZS CBL 8. 已重复要求支付这一账目，仍然徒劳无效，现在我们通知你 方，我们将向法院起诉以收回上述款项。

37. 7. 关于我们要求结清上述账目的7月15日的函电没有收到任何 答复，我们再一次致电提醒你们此事。 C: OL15JUL REQG ABVACCT STTLD NOREP AGN REMIND BYZS CBL 8. 已重复要求支付这一账目，仍然徒劳无效，现在我们通知你 方，我们将向法院起诉以收回上述款项。 C: REPEATD REQ ZSAMT PAYD W/OAVAIL SUMMONS WLBE TAKENOUT FORRCVRY

38. II. Amendment and extension of L/C 1. 请贵方银行把信用证2931号条文修改为联运提单可以接受。

39. II. Amendment and extension of L/C 1. 请贵方银行把信用证2931号条文修改为联运提单可以接受。 C: PLSASK YRBK AMDL/C2931 READG QUOTE THRUB/L ACPTBL UNQUOTE 2. 由于缺少货轮直航离港，我们要求你方把信用证修改为允许 转运。

40. II. Amendment and extension of L/C 1. 请贵方银行把信用证2931号条文修改为联运提单可以接受。 C: PLSASK YRBK AMDL/C2931 READG QUOTE THRUB/L ACPTBL UNQUOTE 2. 由于缺少货轮直航离港，我们要求你方把信用证修改为允许 转运。 C: DUETOLACK DRCTS/S TOYRPORT PLSAMDL/C ALWG TRSHPMT

41. 3. 由于本月无直达船，我们要求你方信用证HP2012号有效期 展至8月31号。

42. 3. 由于本月无直达船，我们要求你方信用证HP2012号有效期 展至8月31号。 C: NODRCTS/S INST REQEXTEND L/CHP2012 VLDTYTO 31AUG 4. 我们已收到你方8518号信用证，但发现有下列不一致的地 方：分运、转运不许可；我们要求你方指示你方银行对信用证作必要的修改。

43. 3. 由于本月无直达船，我们要求你方信用证HP2012号有效期 展至8月31号。 C: NODRCTS/S INST REQEXTEND L/CHP2012 VLDTYTO 31AUG 4. 我们已收到你方8518号信用证，但发现有下列不一致的地 方：分运、转运不许可；我们要求你方指示你方银行对信用证作必要的修改。 C: L/C8518 RCVD FOUNDFLWG DISCRPNCS PARTSHPMT TRSHPMT PRHBTD PLSINSTRCT YRBK MK NSRY AMDMT

44. 5. 请把你方信用证中“所有银行佣金和费用由受益人承担”的条款取消，因为这样的佣金和费用应该由进口方支付。

45. 5. 请把你方信用证中“所有银行佣金和费用由受益人承担”的条款取消，因为这样的佣金和费用应该由进口方支付。 C: PLSCNCL INYRL/C QUOTE ALLBKCOMM ANDCHRGS FORBENEFS ACCT UNQUOTE ZSONLYPAID BYIMPPARTY 6. 至于信用证的保险条款，要求删去全险，同时应加进平安 险和战争险。

46. 5. 请把你方信用证中“所有银行佣金和费用由受益人承担”的条款取消，因为这样的佣金和费用应该由进口方支付。 C: PLSCNCL INYRL/C QUOTE ALLBKCOMM ANDCHRGS FORBENEFS ACCT UNQUOTE ZSONLYPAID BYIMPPARTY 6. 至于信用证的保险条款，要求删去全险，同时应加进平安 险和战争险。 C: INSCLAUSE INYRL/C PLSDELETE QUOTE ALLRISKS UNQUOTE INSERT QUOTE FPA AND WARRISKS UNQUOTE