国际支付1单元

1、Zhou HongyunBusiness school of Lishui University1st Semester, 2014-20152Course IntroductionnChinese Foreign Trade amounted to US 4.16 trillion in 2013 which increased by 7.6% compared with 2012. nEvery piece of merchandise sold worldwide needs to be paid.nIssues of payment and credit finance are imp

2、ortant to everyone involved in international sales and cannot be considered an esoteric subject understood only by the trade financing departments of international banks.3Course Introduction1、Why do we study international settlement?Do you know how to make payment safely and efficiently in the inter

3、national trade?Do you know how to finance in the international trade?Do you know the customs and practice in international trade payment? An example of payment terms in sales contract: The supplier agrees that the Buyer will effect payments under the term of T/T against receipt of B/L by fax.4nInter

4、national settlement in fact is the course that tells us how to make payment in an international transaction.nIntended learning outcomes: 1.Further understand international payments in terms of more practical issues, methods and cases 2.Further improve business English by learning more terms, practic

5、es ad theories in international trade3.Further enhance your confidence for future career in international trade or banking Course Introduction5Teaching arrangement nTime: about one chapter a week, altogether about 16 weeks, some of the 20 chapters will not be discussed, for example, chapter 5(Contra

6、ct Basics),6(Incoterms 2000),15(Sample bank fees),19(Glossary) and 20(Resources). nMethods: A mixture of methods will be adopted in teaching, including lecturing, questions and answers, group discussion, research project, individual presentation , case studies which will not be conducted strictly in

7、 accordance with the content of the textbook, etc. nRemain relaxed in the study! PhotoDiscCourse Introduction6The Research Object of International Settlement 1.Tools of international payment and settlement（国际结算工具）（国际结算工具）2.Methods of international paymentand settlement（国际结算方式国际结算方式）3. Documents of i

8、nternational Payment and Settlement（国际结算单据国际结算单据）4.International payment system （国际支付体系）（国际支付体系）Bill of Exchange汇票汇票Check支票支票Promissory Note本票本票Remittance汇款汇款Collection托收托收Letter of credit信用证信用证Factoring保理保理Forfeiting福费廷福费廷Letter of guarantee银行保函银行保函Invoice发票发票Transport Documents运输单据运输单据Insurance Do

9、cuments保险单据保险单据 etc.SWIFT(环球银行金融电讯协会）环球银行金融电讯协会） CHIPS（清算所同业支付系统）（清算所同业支付系统）CHAPS（交换银行自动收付系统）（交换银行自动收付系统）etc.Foundation of international settlementNowadays methods are constantly developing 7nRead the textbook before the class (1-3 times).nGo over the lesson and finish the exercises after the class.

10、 nFinal exam：in EnglishCourse Requirements 91. Concept of international settlement2. Types of international settlement3. Basic methods of international payment4. Basic concepts about international payments5. Key issues in international payments Chapter Objectives10nWords meaning of international set

11、tlement (国际结国际结算的字面理解）算的字面理解）What is international settlement?international1. Of, relating to, or involving two or more nations2. Extending across or transcending national boundariessettlementTransfer of money to provide forthe future needs of a personIn simple words, international settlement means

12、money transfer across national borders. 11What is international settlement?nDefinition of International settlement：International settlement refers to the money transfer via banks to settle accounts, debts and claims among different countries.n国际结算的定义：国际结算的定义：国际结算是指处于两个不同国家的当事人，通过银行办理的两国间货币收付业务。12Wha

13、t is international settlement?nThree elements in international settlement（国际结算中的三要素）（国际结算中的三要素）（1）Persons in different countries（不同国家）（2）Banks Participation（银行参与）（3）Funds transfer (资金转移）13Types of International SettlementInternational settlements originate from transactions in the world trade. And i

14、t can be divided into the following two types:Visible TradeInvisible TradeFinancial TransactionPayment between governmentsInternational Trade SettlementInternational Non-Trade SettlementService, Financial transaction, Travel,Other non-trade settlementAccounting for 20% of international settlement, b

15、ut increasing quicklyAccounting for 80% of international settlement14Basic Methods of International SettlementnIn any international trade transaction, credit (信贷信贷) is provided by either the supplier (exporter), the buyer (importer), one or more financial institutions, or any combination of the abov

16、e.The form of credit whereby the supplier funds the entire trade cycle is known as supplier credit (供应商信贷供应商信贷).15Basic Methods of International SettlementSettlement on commercial credit基于商业信用的结算Settlement on bank credit基于银行信用的结算1.Payment in advance(预付货款）2.Open account（赊账交易）3.Remittance(汇付）4.Collect

17、ion（托收）1. Letter of credit（信用证）2. Bank guarantee（银行担保）16Methods of PaymentRisk AssessmentExporters Risk Importers Risk LOWLOWHighHigh Open Account Collection Letters of Credit Cash in Advance17Basic concepts about international payments What are the major types of International Banking Offices facil

18、itating international payment?nRepresentative Office (代表处代表处 Not licensed institution, which cannot accept deposits or make loans, but assist MNC clients of the parent bank)nAgency Office (代理处代理处 One part of the parent bank, not a dependent legal person, which cannot to accept deposits, but can make

19、 loans, trade financing, issuing L/C, and make acceptance.)Foreign Branch (海外分行海外分行)Correspondent Bank (代理银行代理银行)Subsidiary Bank (附属银行附属银行)nAffiliated Bank (联营银行联营银行Partly owned but not controlled by the parent )nConsortium Bank (银团银行银团银行A joint venture in which no single owner has a controlling int

20、erest )18Correspondent Bank（代理银行）（代理银行）Definition:nA bank having direct connection or friendly service relations with another bank. nA correspondent banking relationship exists when two banks maintain deposits with each other.nThe relationship is still very important because a bank cannot do any bus

21、iness without the cooperation of local banks.19uHow to establish correspondent bank relationship? Through signing contract and exchanging control documents (控制文件,如电报押码、密码、收费表及印鉴等) establishing inter-bank accounts (银行往来帐户).l Control documents include: Specimen Signature(印鉴样本） Telegraphic test key（Cab

22、le and telex密押） SWIFT authentic key (SWIFT会员行验证密押) Terms and conditions（条款费率表）l Inter-bank accounts: Banks must open an account in other banks in foreign countries, thus forms the inter-bank accounts Nostro account (我方账号due from account) and Vostro account (你方账号due to account).Correspondent Bank（代理银

23、行）（代理银行）20What are the three inter-bank clearing network for international payment?n SWIFT (The Society for Worldwide Inter-bank Financial Telecommunication环球银行金融电讯协会环球银行金融电讯协会): a major quick and cheap system for international inter-bank fund transfer and clearingnCHIPS (Clearing House Inter-bank P

24、ayment System纽约银行纽约银行同业电子清算系统同业电子清算系统): an inter-bank clearing computer system for USD in New YorknCHAPS (Clearing House Automated Payment System伦敦银伦敦银行同业自动化清算系统行同业自动化清算系统): an inter-bank clearing system for currencies in London Correspondent Bank（代理银行）（代理银行）21Key issues in international payments 1.

25、Credit risks(信用风险）2.Financing costs and risks （融资成本与风险） 3.Foreign exchange risks 4.Political and legal risks 5.Transportation costs and risks 6.Payment method risks7.Others culture risks, economic risks, etc.22nBenefits from careful consideration of these key issues in international paymentsKeep cos

26、ts lower Ensure timely delivery of goods or receipt of payment Eliminate risks of payment Make transaction go smoother Make contract favor your side Key issues in international payments 231. Credit risks nRisks caused by giving easy, extended or inexpensive credit terms in international payments, su

27、ch as the seller gives the buyer the opportunity to resell the goods before payment; the buyer pays to the seller before receiving the goods.nConflicts: both the seller and buyer want the other, not himself, to bear the credit risk. The buyer wants to receive the goods once or even before he pays, w

28、hile the seller wants to receive payment once or even before he ships the goods. Key issues in international payments 242. Financing costs or risks nFinancing costs and risks for the seller: the costs and risks he bears during the period before receiving payment, including manufacturing, packaging,

29、transporting, inspecting, customs clearing, etc. nFinancing costs and risks for the buyer: those he bears during the period before resale of the goods, including waiting, warehousing, reselling, getting paid, etc. nConflicts: both want the other party to finance the transaction and to bear the costs

30、 and risks. Key issues in international payments 25nQuestion for your critical thinking In reality, in order to make an international transaction happen, what do both seller and buyer typically need to do? 2. Financing costs or risks (Cont.) Key issues in international payments 263. Foreign exchange

31、 risks nRisks caused by the appreciation or depreciation of the specified currency for the payment between the contract date and the payment date. nHard currency or soft currencynConflicts: The seller wants to get paid in own currency, a hard currency, or a currency expected to increase in value; th

32、e buyer wants to pay in own currency, or a currency expected to decrease in value.Key issues in international payments 274. Political and legal risks nRisks caused by political instability, changes in trade policy, restrictions on trade, changes in monetary policy, riots, etc.nUsually beyond control

33、, but predictable and avoidable to some extent.n Conflicts: The seller usually considers these risks more important than the buyer. Key issues in international payments 28nSome typical examples of these risks: 1. Transportation documents showing “stop-over Israel port” may not be honored by some Ara

34、bians. 2. Documents showing Taiwan as a country will be not honored by Mainland Chinese. 3. A contract signed in a foreign country was ruled invalid because the trader was improperly in the country on a tourist visa. 4. Political and legal risks (Cont.) Key issues in international payments 295. Tran

35、sportation costs and risks nCosts and risks caused by the shipping of the goods to remote locations, insurance coverage, timeliness. nConflicts: The buyer wants the seller to bear all these costs and risks, thinking in terms of landed cost in his own market (CIF?); the seller wants the buyer to bear

36、 these costs and risks and to deliver the goods and transfer ownership at a local port or warehouse (FOB, Ex-works?)Key issues in international payments 306. Payment method costs and risks nCosts and risks caused by using different methods of international payment, e.g. late payment costs the seller money, while payment in advance means high costs and risks