International Settlement

1. International Settlement 国际结算

2. settlement Domestic Settlement International settlements International Trade Settlement Rules Methods Instruments Exchange Main methods Other methods URC Remittance Promissory note UCP Collection Check Letter of credit URG

3. ①Basic procedure of international settlements Funds Shipping Co. Goods/commodities Goods Importer/ Buyer Exporter/ Seller documents instruments Exporter’s bank Importer’s bank Funds

4. Major Points Concerning International settlements (1) International settlements methods (2) The financial instrument that facilitate International settlements (3)Documents used in International settlements (4) The currencies used in international settlements. (5)Rules and regulations on international settlements. make sure they are different URC522:Uniform Rules for Collection UCP500:Uniform Customs and Practice for documentary credit

5. Documentary Letter of Credit跟单信用证 • A documentary credit requires the following documents • Draft • Commercial invoice • Bill of lading • Insurance document • Packing list • Weight certificate, quantity certificate • Certificate of origin • Beneficiary’s certificate • Cable copy

6. Draft/Bill of Exchange 汇票 • The word of draft/ bill of exchange • Authorization of unconditional payment • A fixed sum: amount • The name of the payer/drawee • The name of the payee/drawer • The issuing date, tenor • Signature of the drawer

7. Type of Draft • Banker’s Draft and Commercial Draft • Sight Draft and Usance Draft At sight At ____days after sight At ____days after issue At ____days after Bill of Lading • Clean Draft and Documentary Draft A documentary draft is accompanied by the shipping documents

8. Endorsement in a draft • Who is the endorsee? • Who is the endorser?

9. Documentary Definition of a letter of credit 信用证的定义 1. The documentary credit or letter of credit is an undertaking issued by a bank for the account of the buyer(the applicant) or for its own account, to pay the beneficiary the value of the draft and/or documents provided that the terms and conditions of the documentary credit are complied with.

10. 跟单信用证或信用证是银行（开证行）根据买方（申请人）的要求和指示或以银行自身的名义开立的，凭 符合信用证条款的单据，向卖方（受益人）支付一定金额的书面承诺。 The _________________ or ______________ is an __________ issued by a _______ for the account of the __________(the ________) or for its own account, to pay the beneficiary the value of the draft and/or documents _____________________ __________________________________________ __________________________________. Fill in the above blanks and give a complete definition of credit.

11. 2. UCP500 Article 2 Meaning of Credit “Documentary Credit(s)” and “Standby Letter(s)of Credit” (hereinafter referred to as “Credit(s)”) mean any arrangement, however named or described, whereby a bank (the “Issuing Bank”) acting at the request and on the instructions of a customer (the “Applicant”) or on its own behalf, provided that the terms and conditions of the credit are complied with.

12. is to make a payment to or to the order of a third party(the “Beneficiary), or is to accept and pay bills of a customer(the “Applicant”) or on its own behalf; • authorizes another bank to effect such payment, or to accept and pay such bills of exchange(Draft(s)), or • Authorizes another bank to negotiate, against stipulated documents(s), provided that the terms and conditions of the Credit are complied with. i.向第三者或其指定人进行付款，或支付或承兑 受益人开立的汇票；或 ii.授权另一家银行进行该项付款，或承兑和支付汇票； iii.授权另一家银行议付。 Question Who is the drawee of a draft under a letter of credit?

13. Characteristics of a letter of credit 信用证的特点 1. The issuing bank undertakes to effect payment, quite independent of whether the applicant is bankrupt or is in default or not, provided the documents presented are in compliance with the terms and conditions of the credit.

14. 1. The issuing bank assume the primarily liability of payments. drawee： bank Can the applicant Be the drawee? Issuing bank Nominated bank

15. UCP500 Article 9, A, iv. A credit should not be issued available by Draft(s) on the Applicant. If the Credit nevertheless calls for Draft(s) on the Applicant, banks will consider such Draft(s) as an additional document(s). 开立信用证时，不应以申请人作为汇票付款人。如信用证仍规定汇票付款人为申请人，银行将视此汇票为附加的单据。

16. Characteristics of a letter of credit 信用证的特点 2.A letter of credit stands independent of the sales contract.

17. UCP500 Article 3 Credits v Contracts • Credit, by their nature, are separate transactions from the sales or other contract(s) on which they may be based and banks are in no way concerned with or bound by such contract(s), even if any reference whatsoever to such contract(s) is included in the Credit. Consequently, the undertaking of a bank to pay, accept and pay Draft(s) or negotiate and/or to fulfill any other obligation under the Credit is not subject to claims or defenses by the Applicant resulting from his relationships with the Issuing Bank or the Beneficiary. • Beneficiary can in no case avail himself of the contractual relationships existing between the banks or between the Applicant and the Issuing Bank.

18. a.就性质而言，信用证与可能作为其依据的销售合同或其它合同，是相互独立的两种交易。即使信用证中提及该合同，银行亦与该合同完全无关，且不受其约束。因此，一家银行作出付款、承兑并支付汇票或议付及/或履行信用证项下其它义务的承诺，并不受申请人与开证行之间或与受益人之间在已有关系下产生的索偿或抗辩的制约。a.就性质而言，信用证与可能作为其依据的销售合同或其它合同，是相互独立的两种交易。即使信用证中提及该合同，银行亦与该合同完全无关，且不受其约束。因此，一家银行作出付款、承兑并支付汇票或议付及/或履行信用证项下其它义务的承诺，并不受申请人与开证行之间或与受益人之间在已有关系下产生的索偿或抗辩的制约。 b.受益人在任何情况下，不得利用银行之间或申请人与开证行之间的契约关系。

19. The relationship among the S/C,application • form and credit. sales contract─>application form─ ─ >credit importer importer issuing bank issuing bank all parties to credit exporter ２.Sales contract=Credit（？） An issuing bank states “the documents are not complied with the sale contract”, can this be a due course to dishonor the bill by the issuing bank?

20. Characteristics of a letter of credit 信用证的特点 UCP500 Article 4 Documents v. Goods/Services/Performances 3.In Credit operations all parties deal with documents, and not with goods, services or other performances to which the documents may relate.

21. Characteristics of a letter of credit 信用证的特点 4.Banks assumes no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any documents , or for the general and/or particular conditions stipulated in the document(s) or superimposed thereon; nor do they assume any liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods represented by any document(s), or for the good faith or acts and/or omissions, solvency, performance or standing of the consignors, the carriers, the forwarders, the consignees or the insurers of the goods, or any other person whomsoever. UCP500 Article 15 Disclaimer on Effectiveness of Documents 对单据有效性的免责

22. 银行对于任何单据的形式、完整性、准确性、真伪性或法律效力，或对于单据上规定的或附加的一般性及/或特殊性条件，概不负责；银行对于任何单据中有关的货物描述、数量、重量、质量、状况、包装、交货、价值或存在与否，对于货物的发货人、承运人、运输行、收货人或保险人，其它任何人的诚信、行为及/或疏忽、清偿能力、执行能力或信誉概不负责。银行对于任何单据的形式、完整性、准确性、真伪性或法律效力，或对于单据上规定的或附加的一般性及/或特殊性条件，概不负责；银行对于任何单据中有关的货物描述、数量、重量、质量、状况、包装、交货、价值或存在与否，对于货物的发货人、承运人、运输行、收货人或保险人，其它任何人的诚信、行为及/或疏忽、清偿能力、执行能力或信誉概不负责。

23. Bank’s responsibility The main responsibility of banks is to examine each document presented to see whether it appears on the face to be in compliance with the credit terms. words and expression The principles of checking the documents strictly complied with the credit essentially complied with the credit

24. Characteristics of a letter of credit 信用证的特点 5.Banks dealing letter of credit business assume no responsibility for the acts of third parties taking part in one way or another in the credit transaction.

25. 5.1.2 Characteristics of a letter of credit 信用证的特点 6.Banks’s responsibility is limited and under certain conditions.

26. １.Limit：amount limit, time limit The issuing’s liability is not exceed the amount of the credit. 2.Conditions: ⑴all documents must be complied with the credit; ⑵ all documents must be complied with the commercial invoice The banks must examine the documents , the banks undertake to make payment only upon the documents are complied with the terms and conditions of the credit.

27. UCP500 Article 39 The words “about”, “approximately”, “circa” or similar expressions used in connection with the amount of the Credit or the quantity or the unit price stated in the Credit are to be construed as allowing a difference not to exceed 10% more or 10% less than the amount or the quantity or the unit price to which they refer.

28. Parties involved in a documentary credit 信用证的当事人 一、开证申请人(APPLICANT) 二、开证行(ISSUING BANK/OPENING BANK) 三、通知行(ADVISING BANK) 四、受益人(BENEFICIARY) 五、保兑行(CONFIRMING BANK) 六、议付行(NEGOTIATING BANK) 七、付款行(PAYING BANK) 八、承兑行(ACCEPTING BANK) 九、偿付行(REIMBERSING BANK) Main parties 基本当事人 指定银行 Nominated Bank

29. 跟单信用证的操作流程      1.买卖双方在贸易合同中规定使用跟单信用证支付。 2.买方通知当地银行（开证行）开立以卖方为受益人的信用证。 3.开证行请求另一银行通知或保兑信用证。 4.通知行通知卖方，信用证已开立。 5.卖方收到信用证，并确保其能履行信用证规定的条件后，即装运货物。 6.卖方将单据向指定银行提交。该银行可能是开证行，或是信用证内指定的付款、承兑或议付银行。 7.该银行按照信用证审核单据。如单据符合信用证规定，银行将按信用证规定进行支付、承兑或议付。 8.开证行以外的银行将单据寄送开证行。 9.开证行审核单据无误后，以事先约定的形式，对已按照信用证付款、承兑或议付的银行偿付。 10.开证行在买方付款后交单，然后买方凭单取货。 

30. Applicant Issuing bank Reimbursing bank Confirming bank Advising bank Accepting/ Paying bank Negotiating bank Beneficiary

31. 1. Applicant 开证申请人 Importer or buyer, who fills out and signs an application form, requesting the bank to issue a credit in favor of an exporter abroad.

32. 2. Issuing bank开证行 Undertakes full responsibility for payment against proper documents presented by the beneficiary.

33. 3. Advising bank通知行 ⑴Correspondent bank or branch of the issuing bank. ⑵ It has the task of informing the beneficiary the credit. ⑶ It has to authenticate the credit.

34. Two articles are relative advising bank in UCP500: ⑴Article 7 Advising bank’s liability ⑵ Article 12 Incomplete or Unclear Instruction

35. Article 7 Advising bank’s liability • A credit may be advised to a Beneficiary through another bank(the “Advising Bank”) without engagement on the part of the Advising Bank, but that bank, if it elects to advise the Credit, shall take reasonable care to check the apparent authenticity of the Credit which it advised.If the bank elects not to advise the Credit, it must so inform the Issuing Bank without delay.

36. b.If the Advising Bank cannot establish such apparent authenticity it must inform, without delay, the bank from which the instructions appear to have been received that it has been unable to establish the authenticity of the Credit and if it elects nonetheless to advise the Credit it must inform the Beneficiary that it has not been able to establish the authenticity of the Credit.

37. 第七条 通知行的责任a．信用证可经另一家银行（“通知行”）通知受益人，但通知行无须承担付款承诺之责任。如通知行决定通知，就应合理审慎地核验所通知的信 用证的表面真实性。如通知行决定不通知，就必须不延误地告知开证行。b．如通知行不能确定信用证的表面真实性，就必须不延误地告知发出该指示的银行，说明本行不能确定该信用证的真实性。如通知行仍决定通 知，则必须告知受益人本行不能核对信用证的真实性。

38. Article 12 Incomplete or Unclear Instruction If incomplete or unclear instructions are received to advise, confirm of amend a Credit, the bank requested to act on such instructions may give preliminary notification to the Beneficiary for information only and without responsibility. This preliminary notification should state clearly that the notification is provided for information only and without the responsibility of the Advising Bank. In any event, the Advising Bank must inform the Issuing Bank of the action taken and request it to provide the necessary information. The Issuing Bank must provide the necessary information without delay. The Credit will be advised, confirmed or amended, only when complete and clear instructions have been received and if the Advising Bank is then prepared to act on the instructions.

39. 4. Beneficiary 受益人 The exporter or the seller in whose favor the credit is issued. Who has the liability to prepare the documents and has the right to get payment if the documents are complied with the terms and conditions of the credit.

40. 5. Confirming bank 保兑行 A bank, usually the advising bank, which adds its undertaking to those of the issuing bank and assumes liability under the credit.

41. 6. Negotiating bank议付行 A bank that purchasesthe documents under the credit. If all the credit terms are met, the negotiating bank will buy the exporter’s drafts with recourse and then it will send the drafts and documents to the issuing bank for reimbursement. Question Can a negotiating bank be the drawee bank under a LC?

42. 1.Documents Negotiating bank Beneficiary 2.pay the value and getthe right of the documentary bill payee Negotiating bank is the holder in due course endorsee

43. 7. Paying bank 付款行 A bank who is authorized by the issuing bank to pay the beneficiary according to the terms and conditions of the credit. deferred paying bank sight paying bank Advising Bank This bank is the drawee bank, when issuing bank dishonor the documents, it has no right of recourse to the beneficiary.

44. 8. Accepting bank 承兑行 A usance credit nominates a bank to accept the usance bill, this bank is the accepting bank under the credit. This bank is the drawee bank, when issuing bank dishonor the documents, it has no right of recourse to the beneficiary.

45. 9. Reimbursing bank偿付行 A bank from which the nominated paying bank or any negotiating bank that has made a payment under the credit may obtain reimbursement. This bank has no obligation to check the documents.

46. Issuing Bank Documents Remitting Bank Reimburse by airmail Reimbursing Bank Reimbursement Reimburse by cable/telex