Tiểu luận môn thanh toán quốc tế documents in international payment

BỘ GIÁO DỤC VÀ ĐÀO TẠO TRƯỜNG ĐẠI HỌC KINH TẾ QUỐC DÂN - - INTERNATIONAL PAYMENT Topic: Documents in international payment Instructors: Nguyen Thi Dieu Chi PhD Class: EEP of Banking 56 Group 7: Nguyễn Thành Lâm Nguyễn Thị Thu Trang Đào Quang Minh Lê Trọng Nghĩa Nguyễn Thanh Thảo Đỗ Thị Mỹ Hạnh Bùi Thị Mỹ Linh Ha Noi, 4/2017 I Overview • A letter of credit is an undertalking between the issuing bank and the benefit o pay, accept bill of exchange and make payment on maturity provided the beneficiary fulfills the requirement under a credit • • Export and Import Documents lies at the heart of all international trade transactions In provides exporters and importers with an accounting record; shipping and logistics companies with instructions of what to with freight information; and banks with instructions and accounting tools for collecting payments Export documents are more complex than those used for domestic sales due to the special characteristics of international trade: geographical distance, different customs laws, different means of transport, greater risks, etc The documents required for each shipment will depend on the conditions of sale (Incoterms) agreed between seller and buyer - 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 bankers and commercial parties in more than 175 countries in trade finance Some 11-15% of international trade utilizes letters of credit, totaling over a trillion dollars (US) each year Article 17 UCP: Original Documents and Copies a At least one original of each document stipulated in the credit must be presented b A bank shall treat as an original any document bearing an apparently original signature, mark, stamp, or label of the issuer of the document, unless the document itself indicates that it is not an original c Unless a document indicates otherwise, a bank will also accept a document as original if it: i appears to be written, typed, perforated or stamped by the document issuer’s hand; or ii appears to be on the document issuer’s original stationery; or iii states that it is original, unless the statement appears not to apply to the document presented d If a credit requires presentation of copies of documents, presentation of either originals or copies is permitted II Types of documents in international payments I Transport document • Bill of lading • Airway bill • Non-negotiable sea way bill • Multimodal transport document BILL OF LADING A bill of lading is one of the most common – and important – documents in the shipping and logistics industry It’s been a key aspect of international trade for centuries, and because of its pervasiveness in the industry, it’s easy to overlook this type of document But to so would open you up to a world of shipping troubles -What is a Bill of Lading? Typically abbreviated as B/L or BoL, a bill of lading is a legal transport document issued by a carrier to a shipper It plays three different roles: 1) Evidence of contract of carriage with details of the amount, type, and destination (and even sometimes the condition) of the shipped freight 2) Receipt that the goods have been properly loaded onto the transporting vessel 3) Title of goods, which often requires the carrier to turn over the goods to the consignee (receiving party) noted on the BoL Historically, the word “lading” comes from an Old English term meaning “loading.” These bills have existed in some form or another since the Roman times, but they became a more common practice during the Medieval times -BoLs are vital to the successful transportation of goods Primarily, the document serves as a legally-binding agreement which helps the carrier process the cargo according to the original contract terms set up by the carrier and shipper or freight owner This means the BoL can be used in litigation concerns, and inaccurate BoLs can expose carriers to anything from claims to criminal prosecution Additionally, since most BoLs are considered a title of goods, these documents (much like the cargo they list) can be used in negotiations Because of this, some types of BoLs can be endorsed and transferred to third parties while the cargo is in transit, ultimately giving control of the cargo to different parties along the route This also means that if a carrier hasn’t been paid in full for the transportation of the cargo, the carrier can keep the bill of lading and goods until terms of the sale are finalized -Depending on the type of BoL (see below), various information should be listed on the document, including: Carrier name and a signature from the carrier, the ship’s master, or a legal representative of either of these parties Date and indication of goods being loaded onto a vessel Notation of the port of loading and the port of destination Terms and conditions of carriage or a reference to these conditions listed in another document Detailed description of the goods being shipped (value, count, weight, size, markings/numbers, etc.) Name of the consignee Any special instructions for shipping This information is just some of the items which may be required on a BoL A marine/ocean shipping BoL, for example, will also need the name of the ship written on the document - There are several different kinds of BoLs, but only some of them are used on a regular basis: Straight: As the name indicates, this BoL is used when goods are already fully paid for and shipped directly to the consignee/customer Straight BoLs are non-negotiable Shipper’s order: These BoLs are used when cargo is purchased on credit, and are handled through a bank Shipper’s order BoLs are negotiable documents and function like a title of goods A buyer usually needs the original or a copy of the BoL to take possession of cargo at destination Air waybill: These BoLs are exclusively issued for goods transported by air, and are nonnegotiable Originals: Some BoLs are issued in what’s known as “sets of originals,” and are used to help control the cargo when the consignee/buyer hasn’t yet fully paid the manufacturer of the goods Once the buyer presents the full set of original documents and pays the manufacturer, the goods can be released to the consignee Inland: When cargo is only transported on land (such as over rail or roads), an inland BoL is issued Multimodal/combined transport: This type of BoL is exactly what it sounds like: a document issued for a shipment which is using more than one mode of transportation (i.e ocean, air, land, etc.) Through: A through BoL is similar to a multimodal/combined transport BoL, but it’s more complex in that it accounts for different distribution centers as well as various modes of transportation Through BoLs require both an ocean and inland BoL to be effective Despite the existence of through BoLs, multimodals are still more commonly used across the shipping industry Switch: This type of BoL is commonly used during foreign-to-foreign shipments, where the shipper requires their suppliers information to be kept private During this shipment, there will be two sets of bills “switched” to protect the suppliers information from the consignee and vice versa - Bills of Lading used on a less frequent basis Blank endorsed: This is a BoL which has been endorsed but doesn’t name an endorsee Essentially, this means the holder of the BoL can claim possession of the goods, and as such this document is considered negotiable A buyer/shipper who holds the original BoL can claim the goods from the carrier at destination as long as the holder submits at least one original copy of the BoL Clean: These documents are used to simply indicate the cargo was in good condition when loaded onto a vessel, much like a carrier’s official sign-off Claused: Claused BoLs are the opposite of a clean BoL, because they indicate a shortfall or damage to the delivered cargo These are also known as a “dirty” or “foul” BoL On board: Also known as a “shipped on board” BoL, this is usually a notation put on a BoL to indicate goods are in good condition and are indeed on board a named vessel Banks which fund shipments require these BoLs over all other types On deck: An on deck BoL is used as proof of shipment and can be required for an exporter or manufacturer of the cargo to get paid When ordering products, it’s important you speak to your logistics provider about which type of BoL will be required for your shipment They’ll be able to discuss the specifics of the BoL with you accordingly Bills of lading may seem complicated at first, but you’re only ever going to be dealing with one BoL at a time per shipment This makes it easier for you to focus on the document and make sure it’s as accurate as possible during your logistics negotiations and process BoLs which are properly processed will ensure you receive your products as ordered and in working/good condition 2.'Air Waybill - AWB' DEFINITION A document that accompanies goods shipped by an international courier to provide detailed information about the shipment and allow it to be tracked The air waybill has multiple copies so that each party involved in the shipment can document it As prescribed by IATA, the Air Waybill consists of original copies, with a minimum of and a maximum of 11 additional copies FUNCTIONS OF THE AIR WAYBILL • Proof of receipt of goods for shipment: when the shipper delivers his goods for carriage, he expects to receive a receipt as proof that he has tendered the goods in a good order and condition Therefore, a copy of the Air Waybill duly signed by the Airline (or IATA Cargo Agent) is given to the shipper as evidence of acceptance of his goods Upon issue of a copy to the shipper (blue), the airline acknowledges that it has accepted the carriage the shipment described in the Air Waybill (in outwardly good condition, unless stated on the Air Waybill) • Evidence of contract of carriage: the Air Waybill, once executed, serves as documentary evidence of the conclusion of a contract of carriage, of which the airline company and the consignee (green and pink) receive one original copy each Before such a contract of carriage becomes valid, it must be signed by the shipper or his/ her representative and the airline or IATA Cargo Agent acting on its behalf Where the same person is acting on behalf of both, the shipper and the airline, he/ she must sign Air Waybill twice The conditions of the carriage agreement are printed on the reverse side of the tree original copies The Air Waybill therefore contains all transport instructions (including route, means of payment, etc.), and the persons involved with the transport can identify the shipment by use of the Air Waybill By referring to this Waybill, the consignee can also check whether the contract of carriage has been fully complied with • Proof of insurance: If the shipment is “insured on waybill” against transport risk, then the Air Waybill also serves as a proof of insurance The Air Waybill must be completed appropriately • Basis for air cargo rate calculation: as the Air Waybill shows all charges connected with the transportation by air, the Air Waybill serves as a basis for the calculation of cargo rates and the settlement between the carrier and the shipper or consignee as well as between the companies involved in the transport TYPES OF AIR WAYBILLS • The Neutral Air Waybills (NAWBs) as recommended by IATA Neutral Air Waybills (NAWBs) are exclusively printed and obtained through IATA verification and clearance Once the cargo agent or shipper obtains the assigned Air Waybill number provided by the airline or the IATA air cargo agent that is entitled to issue House Air Waybill, the NAWBs are approved for computer printers and have the same validity as Master Air Waybills or House Air Waybills • Master Air Waybills (MAWBs) Master Air Waybills (MAWBs) are the regular airline Bills of Lading issued by the originating airline when more than one airline is involved with a shipment, or when freight forwarders issue House Air Waybills MAWBs are used for individual consignments As for the airlines, there is no difference in MAWBs whether the consignment is a single shipment directly from the shipper or forwarder, or a consolidated shipment from consolidators • House Air Waybills (HAWBs) If forwarders take on the function of a carrier and based on which, Air Waybills are issued in its own name, these Air Waybills are called Forwarder Bills of Lading or House Air Waybills 3 Non-negotiable sea way bill Definition: Non-negotiable sea way bill (a straght bill of lading) is a transport documents used in sea shipments It names the consignee which is entitled to take delivery of the cargo It is non-negotiable, which means that the consignee cannot endorse the bill and transfer it to another person to take delivery of the cargo Prescribed under UCP ariticle 21 Function: Transport receipt Transport contract between consignor and consignee Multimodal transport document UCP article 19 Transport Document Covering at Least Two Different Modes of Transport a A transport document covering at least two different modes of transport (multimodal or combined transport document), however named, must appear to: i indicate the name of the carrier and be signed by: • the carrier or a named agent for or on behalf of the carrier, or • the master or a named agent for or on behalf of the master Any signature by the carrier, master or agent must be identified as that of the carrier, aster or agent Any signature by an agent must indicate whether the agent has signed for or on behalf of the carrier or for or on behalf of the master ii indicate that the goods have been dispatched, taken in charge or shipped on board at the place stated in the credit, by • pre-printed wording, or • a stamp or notation indicating the date on which the goods have been dispatched, taken in charge or shipped on board The date of issuance of the transport document will be deemed to be the date of dispatch, taking in charge or shipped on board, and the date of shipment However, if the transport document indicates, by stamp or notation, a date of dispatch, taking in charge or shipped on board, this date will be deemed to be the date of shipment iii indicate the place of dispatch, taking in charge or shipment and the place of final destination stated in the credit, even if: a the transport document states, in addition, a different place of dispatch, taking in charge or shipment or place of final destination, or b the transport document contains the indication "intended" or similar qualification in relation to the vessel, port of loading or port of discharge iv be the sole original transport document or, if issued in more than one original, be the full set as indicated on the transport document v contain terms and conditions of carriage or make reference to another source containing the terms and conditions of carriage (short form or blank back transport document) Contents of terms and conditions of carriage will not be examined vi contain no indication that it is subject to a charter party For the purpose of this article, transhipment means unloading from one means of conveyance and reloading to another means of conveyance (whether or not in different modes of transport) during the carriage from the place of dispatch, taking in charge or shipment to the place of final destination stated in the credit i A transport document may indicate that the goods will or may be transshipped provided that the entire carriage is covered by one and the same transport document ii A transport document indicating that transhipment will or may take place is acceptable, even if the credit prohibits transhipment.transportation It Need not be titled as a ‘Multimodal’ or ‘Combined’ transport document even if it is named that way in the credit It Is a negotiable document/document of title II GOODS DOCUMNETS • • • • Invoice Packing list Certificate of origin Certificate of inspection INVOICE An invoice is a document sent to a buyer that specifies the amount and cost of products or services that have been provided by a seller There are main types of invoice: Proforma invoice – PI - After the buyer sends the purchase order to the seller, the buyer will send proforma invoice to the buyer basing on the purchase of order to make the payment - PI Contents: • Seller: name, address, telephone of seller • Buyer: name, address, telephone of buyer • Number and date of PI • Payment: Condition of payment Example: repayment 100% (By T/T, 100% advance) or deposit 30%, 70% remains after sending a copy document copy (By T/T, 30% advance, 70% against of copy shipping docs)… • Port of Loading: (VD: Hai Phong port, Viet Nam; Ho Chi Minh port, Viet Nam…) • Port of Destination: (VD: Incheon port, Korea; Oslo port, Norway…) • ETA: Estimated Time Arrival • Product decription, amount, unit, price • Information of bank to the payment Here is an sample of PI In reality, there might exists other information or different content - Commercial Invoice – CI - After loading products into container and put them onto board, the seller will send CI and other documents (bill of lading, packing list, ) to the buyer to the payment - The content of CI is not different much with those of PI In letter of credit transaction, CI must show the content strictly and word by word exactly, even dot and comma as prediscribed in letter of credit - - CI is saved in file of each purchase of order and contract, it also is the basis for comparing payments of customer 2 Packing List Contents of packing list  A packing list is expresses the contents of a package, along with details about the quantity, description, and weight of these contents Content pricing is not included  A packing list is created by the seller and sent to where the goods are located in order to have an accurate tally of the sent goods Once the goods have been tallied and packed, the list is sent along with them to their destination 3 Certuficate of inspection a Definition: A document certifying that merchandise (such as perishable goods) was in good condition at the time of inspection, usually immediately prior to shipment Pre-shipment inspection is requirement for importation of goods into many developing countries When used as a required document under letter of credit terms, the details and identity of the party providing the inspection should be mentioned If this not done, banks will accept any document appearing on its face to be an inspection certificate issued by any party other than the beneficiary A certificate of inspection is also called an inspection report or an inspection certificate A certificate of inspection is required for import of industrial equipment and perishable goods It certifies that the goods meet the required specifications in terms of quality and quantity when it left the port of departure SGS is an international inspection agency works all over the world in the field of improving quality and productivity, reducing risk, verifying compliance and increasing speed to market SGS has offices worldwide to facilitate exporters to improve best quality of products exporting SGS is a free independent body specialized in various levels with a motto of serving best quality Since the distance from buyer and seller is very far, the buyer can appoint an international inspection agency like SGS to make sure on the quality of goods he buys Inspection charges of SGS are met by either buyer orWhat is SGS Inspection in Exports and Imports copy supplier as per mutually agreed terms before export Some of the foreign buyers require the suppliers to get the inspection done by SGS with certificate of approval This type of inspection helps buyers to make sure about the quality of goods as per his required parameters While placing purchase order, the buyer provides the complete specification of goods The buyer insists SGS inspection as one of the terms and conditions of export contract The exporter arranges SGS professional locally to inspect export goods, SGS satisfies the quality as per buyer’s requirements and certifies Once after completion of satisfied inspection by meeting all required specification as per buyer’s requirements, the SGS issues a certificate on inspection This certificate has to be enclosed along with other shipping documents to buyer SGS charges are paid either by the exporter or importer as agreed at the time of contract 4 Certificate of origin Definition: A document issued by an authority, as stated in the documentary credit, stating the country of origin of goods The CO is typically required by the buyer’s (import’s) country as a requirement for import processing A CO can be the key document required for obtaining special (reduced) tariff rates for imports from coutries listed as beneficiaries to program such as the GSP CO is often issued by reginal chamber of commerce or nation’s chambers of commerce and industry A certificate of origin (often abbreviated to C/O, COO or CoO) is a document used in international trade In a printed form or as an electronic document, it is completed by the exporter and certified by a recognized issuing body, attesting that the goods in a particular export shipment have been produced, manufactured or processed in a particular country A "Certificate of Origin" is also called a "Form A” Types of certificates of origin Non-preferential and preferential Regional declinations Electronic certificates of origin III Insurance document I, Definition: Insurance document is a contract representing an agreement whereby the insurer undertakes to indemnify the insured , in the manner and to the extent agreed , in terms of space-time and risk clauses subject to the principle of proximate clause, for insureable property lost or damaged by perils, incidental to adventure The contract can be assigned by endorsement and delivery to the other party II, Kinds of insurance certificate 1, Insurance policies: Insurance policies are documents issued by insurance organizations, including the key provisions of the insurance contract, in order to formalize this agreement Insurance Applications include: -The general conditions and regular nature, in which it specifies the responsibility of the insurer and the insured - The terms of the insured individual (names, numbers, signs and symbols, names and more cargo vessels, ) and the calculation of premiums 2.Insurance certificate Insurance certificate is a document issued to the insurer by the insured to confirm the goods have been insured under the contract conditions The content of the certificate of insurance covers only terms speak insured object, the details necessary for the calculation of premiums and insurance conditions agreed III, function: -Certificate for a shipment was insured, contribute to addressing the risks that may occur in the operating internationally -Solve somewhat damage occurred during sea operation because insurance is a form of risk diversification principle of community ... taking in charge or shipment or place of final destination, or b the transport document contains the indication "intended" or similar qualification in relation to the vessel, port of loading... transport document BILL OF LADING A bill of lading is one of the most common – and important – documents in the shipping and logistics industry It’s been a key aspect of international trade for centuries,... agreement are printed on the reverse side of the tree original copies The Air Waybill therefore contains all transport instructions (including route, means of payment, etc.), and the persons involved