【正文】 rms 2021 as the source of reference for definition. . USD100 PER TON “CIF Hamburg Incoterms 2021”. Three ponents Payment, ownership and delivery ★ Incoterms deals essentially with questions of risk in goods and responsibility for their carriage, not directly determine when payment is to be made or when ownership in goods is to pass from seller to buyer ★ International payment must be made through banks engaging in foreign exchange dealings. ★ Buyer must sign another contract with bank to effect payment to seller according to contract ★ Method of payment should be determined by buyer and seller in their contract 3 Method of Payment Advance payment ★ Buyer makes payment to a seller before goods are shipped Seller Buyer Payment Ship goods Open account ★ Seller dispatches goods to buyer, and then sends importer an invoice(and other documents) for payment at the end of an agreed period. Seller Ship goods Buyer Payment ★ Buyer pays through bank by following means: Telegraphic Transfer (T/T,SWIFT,etc.), fast and expensive Mail Transfer (M/T), slow and cheap Demand Draft (D/D), slow and easy to be negotiated Flow chart of international bank transfer Buyer 1Apply and buy foreign exchanges amp。 pay charges Remitting Bank 2M/T rept. 3PO + BT by M/T or T/T 4M/T or T/T adv. Seller 5Rept. 6Pay Paying Bank 7Debit or credit Advice PO=Payment Order with the name and add. of beneficiary BT= Bank Transfer advising how money is transferred from remitting bank to paying bank With signature or test key Documentary Collection Flowchart Seller/principal 1Deliver goods Carrier 2B/L 3Documents and Instructions (Application) Remitting Bank 4Receipt 5Collection Order or Instruction Collecting Bank 6Advise Buyer/ drawee 7Pay 8Release Documents D/A or D/P 9Hand in docs 10Deliver goods 11Credit Advice or Debit Authorization D/A (documents against acceptance) Seller/principal 1Time draft amp。 Other docs Remitting bank 2Collection order amp。 time draft amp。 docs Collecting bank Buyer/payer 4Accepted draft 3Present time draft for acceptance 5docs Collecting bank keeps accepted draft and at maturity, presents it for payment. D/P at sight Seller / principal 1Sight draft amp。 documents Remitting bank 2Collection Order amp。 sight Draft and docs Collecting bank Buyer/payer 4Pay after checking 3Presents for payment 5docs Only one presentment for payment. D/P at tenor/after sight Seller / principal 1Time draft amp。 other docs Remitting bank 2Collection order amp。 time draft and other docs Collecting bank Buyer / payer 4No docs after acceptance 3Present time draft for acceptance 6docs 5After payment at maturity, buyer gets documents. 5pay The basic documentary credit operation 1Contract Term of payment: Documentary Credit 2Apply Buyer Applicant Issuing Bank 3Documentary credit Advising Bank 4Advise Seller Beneficiary LC is banker’s conditional undertaking of payment. The precondition of LC’s payment is that the documents presented by seller must ply with terms and conditions in LC. Continued Seller Beneficiary 5Dispatch goods Carrier Buyer applicant 6documents Advising bank acting As nominated bank 7Pay 8Send docs to and claim on Issuing Bank 9Reimburse 10pay 11documents 12Take delivery of goods Flow chart of direct letter of guarantee （ 1） Applicant / principal 1apply Guarantee bank 2Letter of Guarantee (LG) Advising bank 3advise beneficiary Advising bank is agent of guarantee bank , and in charge of checking the authenticity of bank guarantee and the documents attached. 8Debit Advise Guarantee bank 6Forward documents Advising bank 4documents Beneficiary 7pay 5pay Flow chart of direct letter of guarantee (2) Payment is made against documents without any investigation of default. If applicant default ,beneficiary is allowed to ask for payments. If documents ply with the requirements in LG guarantee bank must pay. Applicant principal End of lecture Thank you for attending