1. Week 7 Payment

2. Main issues refer to payment Payment time Payment Instrument Payment method

3. Payment Time Time of payment is also an important aspect for a sales transaction. It may be earlier or later than, or the same as the time of delivery. Payment in advance. After the conclusion of a sales contract, the importer pays the purchase price for the goods to the exporter before the exporter begins to make arrangement for manufacturing or delivering the goods. Payment at sight. When the exporter has shipped the goods, he tenders a sight bill and the required shipping documents to the buyer or his bank, asking the latter to make payment at sight of the draft. Collections with sight draft or sight L/C arrangement are payment of such type. Deferred payment. Under this arrangement, the buyer may make payment of the goods a period of time after he has taken delivery of the goods.

4. Payment in International Business In international business, payment is very complicated. During foreign economic activities, international payment refers to the settlement of claims and debts or the transfer of money by certain method of transmission.

5. International Payment Instrument The main instrument of international payment is financial document that is a written debt voucher with fixed form. It includes fixed value and date, and can be used to get money from drawer or specific drawee. 票据

6. Bill of Exchange 汇票 Bills of exchange is a bill signed by the drawer, requiring the entrusted payer to make unconditional payment of certain sum of money on demand or at a fixed date to the payee or the bearer. It can be classified into: banker’s draft and commercial draft according to the drawer, 根据出票人不同：银行汇票和商业汇票 sight draft and time draft according to the tenor; 根据到期日不同：即期汇票和远期汇票 clean draft and documentary draft according to whether there are documents attached. 根据是否附有跟单：光票和跟单汇票

7. Promissory note and Check A promissory note is an unconditional promise in writing made by the maker to the payee or the holder signed by the maker engaging to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified person or the bearer. 本票 A check is an unconditional order in writing addressed by the customer (drawer) to a bank signed by that customer authorizing the bank to pay on demand a sum certain in money to or to the order of a specified person or bearer. 支票

8. Term of payment in international Trade Term of payment in international settlement refers to the way used to settle debt and liability between individuals, enterprises, and groups in different country. It has three major of payment methods: remittance, collection, and letter of credit.

9. Remittance Remittance especially in international trade refers to the importer remits money to the exporter on his initiative through a bank according to the terms and time stipulated in the contract. The parties in remittance generally involve in remitter, payee, remitting bank, and paying bank.

10. Classification of Remittance There are three kinds of remittance: mail transfer (M/T), telegraphic transfer (T/T) and demand draft (D/D). M/T ( 信汇） refers to importer send the fee of goods to the local bank, and this remitting bank issues a trust deed for payment, then sends it to paying bank by mail, and entrusts the latter to notify and pay a certain amount of money to payee. T/T （电汇） is the remitting bank, at the request of the remitter, transfers funds by means of cable/telex/swift message to the paying bank, asking the latter to pay a certain sum of money to the beneficiary D/D （票汇） refers to the remitting bank, at the request of the remitter, draws a bill of exchange on the paying bank, ordering the latter to pay on demand a certain sum of money to the beneficiary who will also be payee of the draft.

11. Remittance Whatever kinds of remittance, the document is always sent to the importer directly by the exporter, and bank does not involve in. In international business, the remittance generally involves in payment in advance, cash with order, cash on delivery, and open account trade. Generally, it is mostly used in payment in advance, commission payment, sample fee payment, prepayment, performance bond, and compensation and so on.

12. Collection Collection means the handling by banks of financial documents and /or commercial documents, in accordance with instructions received, in order to obtain payment and/ or acceptance, or deliver documents against payment and/ or against acceptance, or deliver documents on other terms and conditions The parties in collection refer to principal, remitting bank, collecting bank, presenting bank, and drawee. 委托人、汇出行，托收行, 提示行和付款人。

13. Classification of Collection Collection can be classified into clean collection and documentary collection. Clean collection means collection of financial document not accompanied by commercial documents. Depending on difference of conditions of payment, documentary collection can be divided into document against payment (D/P) documents against acceptance (D/A).

14. Documents against payment(D/P) Documents against payment, as the term suggests, is that the collecting bank will only give the shipping documents representing the title to the goods on condition that the buyer makes payment. Under this paying arrangement, the seller may either draw a sight bill or a time (usance 票据 期限 ) bill. The former is called “D/P sight”, while the later, “D/P after sight or after date”. In the case of D/P sight, the collecting bank presents a sight bill to the buyer, who must make immediate payment after presentation of the bill and gets the shipping documents in return. If it is D/P after sight or date, the buyer must first accept the usance bill when the bank presents it to him, and will make payment when the bill falls due. At that time the buyer can obtain the relevant shipping documents. Documents against acceptance(D/A) Where the paying arrangement is D/A, the collecting bank will only give the buyer the shipping documents after buyer’s acceptance of the time bill drawn on him, i.e. the buyer signs his name on the bill promising to pay the sum when it matures. In return he gets what he needs — the shipping documents. Under D/A, the seller gives up the title to the goods — shipping documents before he gets payment of the goods. Therefore, an exporter must think twice before he accepts such paying arrangement. It is because once he loses control of his goods, he relies entirely on the creditworthiness of the buyer. It is very risky for him to get payment in this manner

15. Sample Letters

16. Dear Sirs ， We have received with many thanks your letter of 13 th April, which give us a competitive and reasonable quotation. We are pleased to accept your quotation and do business with you. However, after long years of satisfactory cooperation, we are surprised that you still demand D/P. So we wish to draw your attention to the term of payment, and we fell that we are entitled to easier and more convenient terms. Most of our suppliers have been drawing on us by their documentary draft at 30 days sight on D/A basis. We should be grateful if you could make out draft for payment 30 days after sight, and the documents will be handed to us on acceptance. We hope to work with you for a longer time and look forward to hearing from you. Faithfully,

17. Dear Sirs, We have pleasure in advising you that your order of 16th February has been shipped today by S.S. Merry Captain from Hongkong. Please find enclosed our invoice for HK $5 500 and note that we have drawn on you for this amount at 30 D/S(30 days after sight) attaching the shipping documents (B/L in duplicate and Insurance Policy) to our draft. As arranged, we have instructed our bank to give up the documents against payment of our draft which we recommend to your protection. Yours faithfully,

18. Letter of Credit Letter of credit is a written undertaking by the issuing bank (the agent for the importer) to the beneficiary (the exporter), under which the bank undertakes to pay the beneficiary a sum certain in money within a designated time period and against any stipulated terms and documents. The parties in L/C include opener, issuing bank, advising bank, beneficiary, negotiating bank, and paying bank.

19. Classification of Letter of Credit From different angles, L/C can be divided into clean L/C and documentary L/C revocable L/C and irrevocable L/C Confirmed L/C and unconfirmed L/C In international business, irrevocable letter of credit is most popular form of L/C. It cannot be amended or cancelled without prior mutual consent of all parties to the credit. Such a letter of credit guarantees payment by the bank to the seller as long as the terms and conditions of the credit have been met.

20. The main content of L/C Illustration of L/C itself, such as L/C’s kinds, nature, value, time of validity, location and so on ； Request for the goods. The name of goods, specification, quantity, packing, price and so on ； Request for transport. The due date of shipping, shipment place and destination place, terms of shipping, allowing or prohibiting transshipment or partial shipment and so on ；

21. Request for documents, including three kinds of documents as follows ： (1) Goods documents （ commercial invoice as a center, including packing list, quantity list, certificate of origin, inspection certificate and so on; (2) Transport documents (bill of lading, which is an evidence of an agent of authority of goods); (3) Insurance documents Except above three documents, other documents may be required, such as sample certificate and copy of shipping advice;

22. Special clauses, making different stipulations according to the change of political and trade conditions in importing countries and the needs of a specific transaction; The obligation sentences made by the issuing bank on guaranteeing to make payment provided the documents. they all need to be showed in document provided by beneficiary (exporter), and make sure be same as conditions of L/C.

23. Payment by L/C usually goes through the following procedure: The importer applies to his local bank to open L/C in favor of the exporter; The importer’s bank issues an L/C and sends it to its branches or correspondent banks in exporter’s place; The exporter’s bank checks the L/C of issuing bank received, and forwards the L/C to the exporter; The exporter effects shipment according to the L/C and prepares all shipping documents and the draft. He presents them to his local bank within the validity period for negotiation. The negotiating bank verifies the draft and documents, and makes payment to the exporter;

24. The advising bank send the draft and documents to the issuing bank to ask for payment; The issuing bank gets draft and documents, then sends them to importer; The issuing bank is called as the paying bank now, which sends money to advising bank; After the advising bank receives money, he sends it to the exporter.

25. Sample Letters

26. Pressing buyer to establish L/C Dear Sirs, Re: Your Order No. 123 for Dresses With reference to our faxes dated the 5 th of February and 10 th of March, requesting you to establish the L/C covering the above mentioned order, we regret having received no news from you up till now. We wish to remind you that it was agreed, when placing the order, that you would establish the required L/C upon receipt of our Confirmation. Needless to say, we are placed in a very embarrassing situation now that one month has elapsed and nothing whatsoever has been heard from you. As goods have been ready for shipment for quite some time, it behoves you to take immediate action, particularly since we cannot think of any valid reason for further delay of opening the credit. We look forward to receiving your favorable response at an early date. Yours faithfully,

27. Seller asking buyer to amend L/C Gentlemen: L/C No.3450 Issued by District Bank We wish to acknowledge receipt of the captioned Letter of Credit for the amount of US $5 000 covering your Order No.987 for Walnutmeat, for which we thank you. It appears that the amount in your L/C is insufficient, as the correct total CIF value of your order comes to US $5 500 instead of $5 000, the difference being US $500. In view of the above, you are kindly requested to increase the amount of your L/C by US $500. Your prompt attention to the matter will be much appreciated. Yours truly,

28. Seller asking buyer to amend L/C Dear Sirs, We have received your Letter of Credit No.4567. Among the clauses specified in your Credit we find that the following two points do not conform to( same with) the Contract: (1) Your Credit calls for (means require ) manufacturer’s Certificates, which is not included in our Contract. In fact, the contracted commodity is a kind of agricultural produce, and it is impossible to obtain a manufacturer’s certificate. 2) The contract number is 82/1245 instead of 92/1345. As the goods are now ready for shipment, you are requested to cable your amendments to the letter of credit as soon as possible. Yours faithfully,

29. Seller asking buyer to extend L/C Dear Sirs, Re: Letter of Credit No. AG8432 We have received your Letter of Credit No. AG8432 for the amount of US $ 2 960 to cover your Order No. 806 for 20 metric tons of... The said credit calls for shipment on or before the 31st of December. As the earliest steamer sailing for your port is the S.S. Peace scheduled to leave Shanghai on or about the 3rd of January, it is, therefore, impossible for us to effect shipment at the time you named. This being the case, we have to ask you to be so kind as to extend the date of shipment to the 15th of January. We understand that cable amendment is costly, but this is a matter over which we can exercise no control. Yours faithfully,

30. Buyer’s refusal of extending L/C Dear Sirs, We received your letter of 15th July requesting us to extend our L/C owing to the fact that you are unable to make shipment within the stipulated time. We wish to point out that if you fail to effect shipment within the stipulated time, we shall not be able to fulfil our contract with our clients. Besides, such delay will certainly cause us a lot of unnecessary inconveniences and expenses. We would, therefore, ask you to try your utmost to effect shipment according to the original schedule. In the event of your failing to do so, we will have to ask you to compensate us for any loss arising therefrom. Awaiting your immediate reply. Yours faithfully,

31. Useful Expressions 1. Common used phrases about terms of payment 支付条款常用词组 financial document 金融票据； negotiable instrument 金融票据； certificate of creditor’s right 债权凭证； bill of exchange 汇票； sight draft 即期汇票； time draft 远期汇票； banker’s draft 银行汇票； commercial draft 商业汇票； documentary draft 跟单汇票； commercial document 商业单据； promissory note 本票； remitting bank 汇出行； paying bank 汇入行； mail transfer 信汇； trust deed ( 信汇 ) 委托书； telegraphic transfer 电汇； demand draft 票汇； banker’s demand draft 银行 即期汇票； remitting bank 托收银行； collecting bank 代收银行； presenting bank 提示银行； drawee 付款人； issuing bank 开征银行； advising bank 通知银行； beneficiary 受益人； negotiating bank 议付银行； paying bank 付款银行； Irrevocable Letter of Credit 不可撤销的信用证； Confirmed Letter of Credit 保兑信用证； Transferable Letter of Credit 可转 让信用证 ; Sight Letter of Credit 即期信用证 ; Usance (Term, Time) Letter of Credit 远期信用证 ; Anticipatory Letter of Credit 预支信用证 ; Revolving Letter of Credit 循环信用证 ; Documentary Letter of Credit 跟单信用证 ; Clean Credit 光票信用证

32. Useful Expressions 2. We will open the L/C upon receipt of your reply. 待收到你方答复后立即开立信用证 3. In spite of our respected requests, still we have not received your letter of credit up to now. Please open the credit immediately, otherwise, we cannot effect shipment in January. 尽管再三催请开证，信用证仍未收到，请立即开证，否则不能 1 月交货。 4. Your L/C No. 1234 calls for shipment in two equal monthly lots while S/C No.2345 stipulates shipment in a single lot to be made not later than 1st July. Please amend accordingly. 第 1234 信用证规定两批装运，每月一次，每次数量相等，而 2345 号合同规 定 7 月 1 号前一次装运，请对信用证作相应修改。 5. Because of the recent fire in the factory, all the stocks were destroyed. In this case, we cannot make shipment as arranged before. Please extend the date of shipment and the expiry date of L/C No. 1234 to 23rd March and 12th April respectively. 由于最近工厂发生火灾烧毁了全部库存，已不能按照原安排交货。请将 1234 号信用证交货期和有效期分别展至 3 月 23 日和 4 月 12 号。

33. Useful Expressions 6. Shipment will be effected subject to an advanced payment amounting 30% to be remitted in the seller’s favour by T/T, and the remaining part on collection basis, documents will be released against payment at sight. 装运货物系以即期信用证规定的电汇方式向卖方提交预付金 30% 为前提，其余部分采用托收，凭即期付款交单。 7. We have received your letter of credit No. 215 issued by the Bank of China. After reading it carefully, we found that transshipment is not allowed, which is just on contrary to our S/C. 兹收到你方由中国银行开具的第 215 号信用证。仔细审阅后， 我们发现该信用证不允许转船装运，而这恰恰与我们的销售 确认书不符。 8. The shipment covered by your Credit No. 12 has been ready for quite some time, but the amendment advice has not yet arrived, and an extension of 15 days is required. 第 12 号信用证下的货物早已备好，但尚未收到信用证修改通 知书，因此要求延期信用证 15 天。

34. Useful Expressions 9. You are kindly appreciated to see to it that punctual delivery is made within the validity of the L/C. 恳请务必在信用证有效期内按时装运。 10 ． Much to our regret, we haven’t received your letter of credit against our Sales Confirmation No.0426, although it should have reached us by the end of May, as stipulated. 很遗憾，尚未收到第 0426 号销售确认书的有关信用证， 按规定它本应在 5 月底抵达我方。

35. Useful Expressions 11. The documentary bill of exchange has been upon you at 60 days under L/C No.123 and has been delivered to the Royal Bank of this city. Documents: (1) Full set of Clean “On Board” Bill of Lading with insurance cover. (2) Commercial Invoice in triplicate. (3) Inspection certificate issued by Logic Inspection House. 我们已按第 123 信用证规定向你开出 60 天见票付款的 跟单汇票，并已提交本市皇家银行。单据为： (1) 连同保险单在内的全套清洁， “ 已装船 ” 提单。 (2) 商业发票 1 式 3 份。 (3) 检验证书（由洛吉检验所签发）。

36. Useful Expressions 12. Our Bankers in Tokyo, Ohiro Bank, will accept your draft on them on our behalf. 我方东京大平银行将代表我方承兑你们开给他们的汇票。 13. We grant your request for payment by L/C with draft at 60days sight. 我们同意接受见票后 60 天付款的远期信用证付款的要求。 14. We enclose a bank draft for $200, being the amount less 2% discount. 我们附寄银行汇票一纸， 金额计 200 美元， 已扣除 2% 折扣。 15. The requesting party shall bear the bank charges for amendment to or extension of Letter of Credit as and when such situations arise. 如果发生需要修改或扩充信用证的情况，提出的一方必须承 担有关银行的费用。 16. We would like you to instruct your bank to authorize their correspondent bank to confirm the L/C when advising us the same. 希望贵方通知你方银行在通知我方的同时，授权其代理行确 认信用证 。

37. Useful Expressions 17. We shall open through a bank an irrevocable Sight Letter of Credit to reach you 10 days before the month of shipment, stipulating that 50% of the invoice value available against clean draft at sight while the remaining 50% on Document against Payment at sight on collection basis. 我们应通过银行开立不可撤销的即期信用证，装运月份前 10 天内到达你处，按发票金额的 50% ，以清洁的即期汇票支付， 其余 50% 以托收方式下即期付款交单。 18. Since there is no direct steamer sailing for your port, we would request you to amend your L/C to allow transshipment. 因为没有驶往你港的直达轮，我方要求修改信用证，允许转 船。 19. Bank of China, Shanghai hereby undertakes to honor all reimbursement claims presented to us under this letter of credit on or before the expiry date stipulate herein/above. 中国银行上海分行确认并承诺在上述所规定的有效期或之前 兑付本信用证项下提交我行的索偿。

38. Useful Expressions 20. Payment to beneficiaries under reserve or against indemnity by debiting our account is not acceptable. 凭保函或保留通过借记我行账户的方式向受益人付款不予接 受。 21. Signed commercial invoice issued in 2/3 original, 1 copy certifying issuance in strict conformity with proforma invoice regarding the unit price and if available trade mark of the manufacture. 签署的商业发票 2 正 1 副，证明本发票的出具在单价上和产品 的商标（如有）与形式发票完全一致。 22. Commercial invoice in four fold showing detailed description of goods. 商业发票一式四份，具有对商品的详细描述。 23. Signed commercial invoice in 3 copies duly certifying that the goods shipped are as per confirmation letter mentioned in field 45A above. 签署的商业发票一式三份，证实所装运货物与上述栏位 45A 所提及的确认函相符

39. Useful Expressions 24. Certificate of origin issued by chamber of commerce in the original must be certified by chamber of commerce and legalized by Saudi consulate/embassy in China stating the country of origin, name and full address of the manufacturer/producer and shipper, confirming that the goods relevant to this L/C are of Chinese origin. 由商会出具的产地证的正本必须由商会证实，并由沙特阿拉伯 驻中国的大使馆 / 领事馆认证。产地证必须说明原产国、制造商 / 生产商和托运人的名称和地址，同时确认与本信用证有关的货物 为中国产。 25. The transferring bank must endorse the amount of such transfer on this letter of credit. 转让行必须对本信用证的转让数额进行背书。 26. Upon receipt of the documents which conform to the terms and conditions of the credit, we shall remit the proceeds to the negotiating bank according to their instruction. 在收到和本证条款 / 条件相符的单证的情况下，我行将根据对方 指示向议付行汇款。

40. Exercise Translate the following terms and expressions: 1. terms of payment 2. commercial credit 3. pay off the trade debt 4. 金融工具 5. 一式两份

41. Exercise Translate the following sentences: 1. 请注意，付款方式为保兑的、不可撤销的即期信用证， 允许转船和分批装运。 2. 我们通常的付款方式为保兑的、不可撤销的、见票即付 的信用证，该信用证的金额与发票金额一致，由我方能 接受的银行以我方为受益人开出。 3. 我们通常的做法是用即期付款交单而不是信用证 ，因 此我们希望这笔交易以及以后的交易你方能接受付款交 单的方式。 4. 我方已经接受你方用远期汇票来支付订单 1156 号货物的 建议。在货物装运之后，我们会向你开立一张 60 天期的 汇票，请到期付款。

42. 5. 我们已收到有关信用证，但发现以下不符合。 6. 信用证必须由我方公司可以接受的银行加以保兑。 7. 在收到信用证后的一个月内，你们至少应装运这笔 订货的一半。 8. 由于我们的疏忽，开立信用证有错误，很抱歉。 9. 信用证 121 号修改书未到，请立即改信，以便早日 装运，电复。

43. 10. In order to save a lot of expenses on opening the L/C, we will remit you the full amount by T/T when the goods purchased by us are ready for shipment and the freight space is booked. 11. We regret to inform you that it is our usual practice of business not to accept payment by D/A. 12. You have to pay us 30% amount for deposit by T/T in 7 days after signing the contract, and the remaining part on collection basis, documents will be released against payment at sight. 13. We require confirmed and irrevocable L/C available by draft at sight against a full set of shipping documents presented to the negotiating bank at the port of loading. 14. You shall establish the covering letter of credit before 20th April, 2010, failing which we reserve the right to rescind the contract without further notice.

44. Answer to last week Translate the following sentences: 1. We are pleased to enclose herewith our contract NO.4567 in two originals for your counter-signature. Please send one copy back to us at your earliest convenience. 2. The conclusion of the dealing is certainly not the ending, it is only the beginning, and a good one, of the long and friendly business relations between us. 3. We refer to our order no.675 dated 15 May, as we have up till now, received no any information from you that goods have been sent, we have no alternative but to cancel this order.

45. 4. 由于最近各方对我们的传真机的需求量很大，我们 无法保证在 11 月 30 日之前交付新订单。 5. 这批货物须在 5 月 31 日前及时运抵，以此为条件， 我们订购此货，如延期交货，我们保留取消订单和 拒绝提货的权利。 6. 由于货源难觅，我们别无选择，只能拒绝你们的订 单。 7. 由于桂芳没能在规定时间内交货，我们只得取消订 购。