1. DOCUMENTARY TRANSACTION
Fundamental Problem-seller fears relinquishing control over its goods before payment, while buyer fears making payment before obtaining possession of the goods.
Methods of Payment
Cash in Advance
Open Account and Consignment
Documentary Collection
Documentary Credit

2. DOCUMENTARY TRANSACTION
Approach
Documentary Transactions
Necessary Documents to Complete International Private Business Transaction
Decision to Export
Bill of Lading
Allocation of Risk Through the Use of Trade Terms

3. Documentary Transaction
Documentary Transaction alleviates the seller’s risk of not being paid or the buyer’s risk of not receiving the goods.
Sale of Goods Contract is converted into a sale of documents contract.
Buyer contracts to buy documents and the seller promises to provide conforming documents to the buyer while goods or in transit.
Buyer can use documents to conduct additional transactions

4. Documentary Transaction
Documentary Collections Documents
Draft or Bill of Exchange-foreign buyer’s check
Sight Draft-immediate payment due to seller.
Cash Against Document-buyer takes possession by either making payment or accepting the draft
Time Draft-payment due at some point in time in the future
Document Against Acceptance-documents transferring title to buyer upon acceptance of time draft.

5. DOCUMENTARY TRANSACTIONS
Sales Contract
Parties to Sales Contract
Freight Forwarder
Customs Broker
Assortment of Common Carriers
Insurance Companies
Commercial Banks
Letter of Credit
Confirming Bank

6. DOCUMENTARY TRANSACTIONS
Checklist for Sales Transaction
Entrance into Sales Contract
Letter of Credit
Confirming Letter of Credit
Hire Carrier of Goods
Insurance Policies
Inspection
Preparation for Shipment
Obtain Shipping Documents
Load Goods on Carriers
Transmit Shipping Document
Payment of Letter of Credit
Customs Clearance
Custom Duties

7. DOCUMENTS
Documents Necessary to Complete International Private Business Transaction
Sales Contract-covers all necessary information to complete transactions in terms of performance, payment, description of goods and third parties.
Commercial Invoice-contains information about goods, seller, buyer and country of origin.

8. DOCUMENTS
Documents
Bill of Lading-contract between owner and common carrier of goods.
Consular Invoice-invoice from country of departure.
Certificate of Origin-origin of export item.
Certificate of Inspection-specification of goods shipped

9. DOCUMENTS
Documents
Insurance Certificates-insurance binder stating type and amount of coverage.
Shipper’s Export Document-allows host country to keep statistics on exports.
Export License-license to export
Packing Slip-list that itemizes the material in each individual package being shipped.

10. DECISION TO EXPORT
Acquisition of Information in the Following Areas-Preparation of Pro Forma Invoice
Objective of Entering Foreign Market
Actual Cost of Exporting Products
Computation of Final Price in Foreign Market
Evaluation of Market Demand and Competition
Modification of Product to Meet Local Laws and Standards
Incidental Expenses in Travel and Communication

11. BILL OF LADING Bill of Lading Functions Forms
Carriage Contract between ship owner and shipper
Evidence of Receipt that the goods were delivered to ship
Document of Title
Forms
Electronic Bill of Lading
On Board Bill of Lading
Received For Shipment Bill of Lading
Straight and Order Bill of Lading
Clean Bill of Lading

12. BILL OF LADING Carriage of Goods By Sea Act Applies to Bill of Lading
Imposes Duties of Performance on Part of Carrier
Provides for Defenses for Carrier If Goods Are Destroyed While In Transit
Per Package Limitation
See Chapter 10 of Text

13. BILL OF LADING
Trade Terms-Allows contracting parties to allocate risk and cost of transporting goods.
Common Terms
CIF-(cost, insurance, freight)-the seller quotes the price for the goods including insurance and all transportation charges.
CFR-(cost and freight)-insurance costs excluded.
CPT-(carriage paid) and CIP (carriage and insurance paid)-modes other than water
EXW (ex work)-seller’s place.
FAS-(free along side)—FCA(free carrier), FOB-free on board
DES-(Delivered EX Ship)-goods delivered to destination specified on bill of lading.

14. BILL OF LADING
Incoterms-created by International Chamber of Commerce to standardize allocation of risk-1990 and Categories
E Group (EX Work)
F Group (FCA, FAS, FOB)
C Group (CFR, CIF, CPT, CIP)
D Group (DAF, DES, DEQ, DDU, DDP)
2000 Revisions-Export Clearance Obligations Under FAS, Loading of Goods on Buyer’s Vessel, Placing Import Clearance obligation under DEQ