上海海事大学国际物流Chapter 6 Terms of Payment.pdfVIP

Chapter 6 Terms of Payment Characteristics of International Payment Issues • Reduced Credit Information • Lack of Personal Contact • Difficult and Expensive Collections • No Easy Legal Recourse • Higher Litigation Costs • Mistrust 上海海事大学高洁 Risks in International Trade Country Risk • Political economical risk • The probability of not getting paid by an importer, because the importing country has: – Insufficient foreign exchange reserves. – Not allowed the creditor to pay the debt (political embargo). Commercial Risk • The probability of not getting paid by an importer, because the importer does not have the funds to pay the debt or refuses to pay the debt. – COFACE 法国信用保险集团 – Unicredit Beijing 北京联信征信咨询有限公司 Exposure (承受力风险) • The relative consequences of a bad-debt risk for an exporter. 上海海事大学高洁 Alternative Terms of Payment • Cash in Advance • Open Account • Letter of Credit • Documentary Collection • Procurement Cards • TradeCard 上海海事大学高洁 Cash in Advance(现金预付) Definition • The exporter requests that the customer provide payment in advance(SWIFT), before shipment of the goods can take place. • It is the ultimate “risk-free” alternative for the exporter. • The risk is completely transferred to the importer. Applicability • This method is only justified in rare cases. • It could be used when the importer is perceived as being very high risk (commercial or country risk). • It should be avoided. 上海海事大学高洁 Open Account(赊销) Definition • The exporter conducts international business in a manner similar to the way it conducts business domestically. • The exporter ships the goods, accompanied by