Monday, April 15, 2013

Payment Methods: Letter Of Credit (Confirmed, Sight)



















  1. Exporter and Importer sign the purchase contract
  2. Importer requests for Letter of credit (LC) and release funds to its Bank
  3. Importer’s Bank Issue LC and sends it to the Confirming Bank
  4. Confirming Bank adds its confirmation to the LC and forwards it to the Exporter’s Bank
  5. Exporter’s Bank advises the LC the Exporter
  6. Exporter ships the goods to the Importer
  7. Exporter forwards shipping documents to its Bank
  8. Exporter’s Bank forwards shipping documents to the Confirming Bank
  9. Confirming Bank transfers the funds to the Exporter’s Bank
  10. Exporter’s Bank pays the Exporter
  11. Confirming Bank forwards shipping documents to the Importer’s Bank
  12. Importer’s Bank release the shipping documents to the Importer
  13. Importer clears its goods using the shipping documents

Payment Methods: Letter Of Credit (Unconfirm, Sight)
























  1. Exporter and Importer sign the purchase contract
  2. Importer requests for Letter of credit (LC) and release funds to its Bank
  3. Importer’s Bank Issue LC and sends it to the Exporter’s Bank
  4. Exporter’s Bank advises the LC the Exporter
  5. Exporter ships the goods to the Importer
  6. Exporter forwards shipping documents to its Bank
  7. Exporter’s Bank forwards shipping documents to the Importer’s Bank
  8. Importer’s Bank transfers the funds to the Exporter’s Bank
  9. Exporter’s Bank pays the Exporter
  10. Importer’s Bank release the shipping documents to the Importer
  11. Importer clears its goods using the shipping documents

Payment Methods: Bill For Collection (Tenor, D/A)


















  1. Exporter and Importer sign the purchase contract
  2. Exporter ships the goods to the Importer
  3. Exporter forwards shipping documents to its Bank
  4. Exporter’s Bank forwards shipping documents to the Importer’s Bank
  5. Importer’s Bank release the shipping documents to the Importer
  6. Importer clears its goods using the shipping documents
  7. Importer pay its Bank for the goods already cleared
  8. Importer’s Bank transfers the funds to the Exporter’s Bank
  9. Exporter’s Bank pays the Exporter

Payment Methods: Bill For Collection (Sight D/P)


















  1. Exporter and Importer sign the purchase contract
  2. Exporter ships the goods to the Importer
  3. Exporter forwards shipping documents to its Bank
  4. Exporter’s Bank forwards shipping documents to the Importer’s Bank
  5. Importer’s Bank release the shipping documents to the Importer
  6. Importer pays its Bank for the goods in exchange for documents received
  7. Importer’s Bank transfers the funds to the Exporter’s Bank
  8. Exporter’s Bank pays the Exporter
  9. Importer clears its goods using the shipping documents

Payment Methods: Open Account (Cash Against Document)















  1. Exporter and Importer sign the purchase contract
  2. Exporter ships the goods to the Importer
  3. Exporter forwards shipping documents to the Importer
  4. Importer transfers funds to pay Exporter