Overview of international trade settlement

Payment settlement often occurs in international trade to solve the creditor-debtor relationship between buyers and sellers, which is called international trade settlement. International trade settlement is a tangible trade settlement based on the transaction of goods and currency. The types of bills used in international trade include bills of exchange, promissory notes and checks, among which bills of exchange are the main form. A bill of exchange is a written unconditional payment order issued by one person to another, requiring the other party (the person who accepts the order) to pay a certain amount to someone, a designated person or a holder at sight or on a regular basis or at some future time. Bills of exchange can be divided into the following categories according to the drawer: bank bills and commercial bills. A bank draft is a draft in which both the drawer and the payer are banks. A commercial bill refers to a bill in which the drawee is an enterprise legal person, company, firm or individual and the drawee is another firm, individual or bank. Depending on whether there are documents-clean bills, documentary bills, clean bills/drafts), the bills themselves do not include freight documents, and bank drafts are mostly clean bills. Documentary draft, also known as letter of credit and bill of lading, is a kind of foreign exchange that can only be paid by bills of lading, warehouse receipts, insurance policies, packing lists, commercial invoices and other documents. Commercial bills are mostly documentary bills, which are often used in international trade. According to the time of payment-sight bill, sight bill refers to the bill that the holder pays immediately after presenting it to the payer, also known as sight bill. A time draft (forward draft) is paid after a certain period or a specific date. In a time draft, a certain date is recorded as the maturity date, and if it is paid on the maturity date, it is a time draft, and if it is paid within a certain period after the date of issue, it is a time draft; If payment is recorded within a certain period after sight, it is a promissory note; If the par value is divided into several parts and the maturity date is specified respectively, it is an installment bill. According to the definition of acceptor-commercial acceptance bill, bank acceptance bill (commercial acceptance bill) is a long-term bill with any enterprise or individual other than the bank as the acceptor. Bank acceptance bill (bank acceptance bill) The acceptor is the bank's time draft. According to the circulation area-domestic draft and international draft. A promissory note is a document issued by one person to another, which promises to pay the holder a certain amount unconditionally at sight or in the foreseeable future. Promissory notes can be divided into commercial promissory notes and bank promissory notes. Commercial promissory notes are promissory notes issued by industrial and commercial enterprises or individuals, also known as general promissory notes. Commercial promissory notes can be divided into spot commercial notes and forward commercial notes, which generally do not meet the conditions of rediscount, especially the forward promissory notes issued by small and medium-sized enterprises or individuals, which are difficult to circulate because of low credit guarantee. Cashier's checks are all at sight. Most promissory notes used in international trade settlement are bank promissory notes. A check is a sight draft drawn by a bank. Specifically, it is a bill issued by the drawer (bank depositor) to the bank (payer), which requires the bank to pay at sight. When issuing a cheque, the drawer shall deposit a deposit not equal to the face value in the paying bank. If the deposit is insufficient, the holder will refuse to pay. This kind of check is called a bad check. The drawer who writes a bad check is responsible. Checks can be divided into: registered checks: the drawer indicates "paid to someone" and "paid to someone or their designee" in the payee column. When a cheque is transferred or circulated, it must be endorsed by the holder, and the payee must sign on the back when withdrawing money. Bearer check: also known as blank check, marked "payable to bearer" in the header column. This check can be transferred without endorsement, and you don't have to sign on the back to withdraw money. Crossed check: Draw two parallel horizontal lines on the front of the check. The holder of this check can't withdraw cash, so he can only entrust the bank to collect money and put it into the account. Guaranteed check: In order to prevent the drawer from writing a blank check, the payee or holder may ask the paying bank to stamp the check with "Guaranteed Payment" to ensure the bank will pay at that time. Transfer check: the drawer or holder writes "transfer payment" on the ordinary check to limit the payment by the paying bank. Settlement method: letter of credit settlement method, remittance and collection settlement method, bank guarantee and the combination of various settlement methods. A. letter of credit settlement letter of credit (L/C for short) is the product of bank credit participating in the settlement of international sales price of goods. Its appearance not only solved the contradiction of mutual distrust between buyers and sellers to a certain extent, but also made it convenient for both parties to obtain bank financing in the process of settlement of payment by letter of credit, thus promoting the development of international trade. Therefore, it is widely used in international trade, so that it has become a major settlement method in international trade today. Letter of credit is a conditional payment commitment made by the bank, that is, the bank issues a certain amount of written documents to the beneficiary according to the applicant's requirements and instructions, and promises to pay with the specified documents within a certain period of time; Or a guarantee that the bank is willing to underwrite the beneficiary's draft on behalf of the applicant under the specified amount, date and documentary conditions. It belongs to bank credit and adopts reverse exchange method. B. remittance and collection settlement methods remittance and collection are commonly used payment and settlement methods in international trade. A. Remittance: also known as remittance, it is a settlement method that the payer remits the money to the payee through various settlement tools through the bank. It belongs to commercial credit and adopts the downstream method. Remittance business involves four parties: payer (remitter), payee (payee or beneficiary), remittance bank and collection bank. Among them, there is a contractual relationship between the payer (usually the importer) and the remittance bank (the bank entrusted with remittance), and there is an agency contractual relationship between the remittance bank and the remittance bank (the agent bank of the remittance bank). When handling remittance business, the remitter needs to fill in the remittance application form to the remittance bank, and the remittance bank is obliged to issue a payment letter to the remittance bank according to the instructions of the remittance application form; After receiving the accounting instruction, the remitting bank is obliged to remit the payment to the payee (usually the exporter). However, the remitting bank and the collecting bank are not responsible for the losses caused by their own fault (such as the loss or delay of the mailing power of attorney, which leads to the payee's inability or delay in receiving the money), and the remitting bank is not responsible for the work fault of the remitting bank. B collection: after the goods are shipped, the exporter draws a draft drawn on the importer (with or without shipping documents) and entrusts the bank at the place of export to collect the payment on behalf of the importer through its branch or correspondent bank at the place of import. It belongs to commercial credit and adopts reverse exchange method. The parties to the collection method include the principal, the collecting bank, the collecting bank and the payer. Principal, that is, the person who draws a draft abroad and entrusts the bank to pay for the collection, also known as the drawer, is usually an exporter; The remitting bank is the export bank entrusted by the exporter to collect money on its behalf; The collecting bank, that is, the importing bank entrusted by the collecting bank to represent the payer in payment collection; Payer (drawee or drawee), the drawee on a bill of exchange is the drawee of collection, usually the importer. Among the above parties, the principal and the collecting bank, the collecting bank and the collecting bank are all principal-agent relationships, but there is no legal relationship between the payer and the collecting bank, and the payer pays according to the sales contract. Therefore, whether the consignor can receive the payment depends entirely on the importer's reputation, and neither the collecting bank nor the collecting bank is responsible. When handling the collection business, the client shall submit a collection power of attorney to the collecting bank, which contains various instructions, and the collecting bank and even the collecting bank shall notify the payer to pay for the collection according to the entrusted instructions. C. Bank guarantee (L/G), also known as bank guarantee, bank guarantee or short letter of guarantee, refers to the written certificate issued by the bank to the beneficiary at the request of the customer to ensure that the applicant will perform the contract according to the regulations, otherwise the bank will be responsible for the payment. D. Combination of multiple settlement methods: In international trade business, only one settlement method can be used for payment and settlement of a transaction (usually), or two or more settlement methods can be combined as needed, such as different commodities, different trading objects and different trading practices, which may be beneficial to facilitating transactions, collecting foreign exchange safely and timely, or properly handling foreign exchange payments. Common settlement methods are: combining letter of credit with remittance, combining letter of credit with collection, and combining remittance with bank guarantee or letter of credit. A. Combining letter of credit with remittance refers to the payment of a transaction, part of which is paid by letter of credit and the balance is settled by remittance. This combination of settlement methods is often used in the transaction of some primary products, and the delivery quantity of these primary products allows a certain degree of flexibility. In this regard, with the consent of both parties, the letter of credit stipulates that the invoice amount should be paid in advance against the shipping documents or a certain percentage of the amount should be paid before the goods are shipped, and the balance should be paid by remittance according to the actual quantity after the goods arrive at the destination (port) or after the re-inspection. To use this combination form, we must first make clear what kind of letter of credit and remittance methods are used, and the proportion of the amount paid according to the letter of credit. B. The combination of letter of credit and collection refers to the payment of a transaction, part of which is paid by letter of credit and the balance is settled by collection. The specific practice of this combination form is usually: the letter of credit stipulates that the beneficiary (exporter) opens two drafts, part of the payment under the letter of credit is paid by clean bill, and the rest is attached to the draft for collection, and the collection adopts the method of D/P at sight or forward. This practice is safer for exporters to collect foreign exchange, and can reduce the deposit for importers, which is acceptable to both parties. However, the letter of credit must indicate the type of letter of credit, the amount of payment and the type of collection method, and must also indicate the clause that "documents can only be presented after the invoice amount is paid in full". C. Remittance combined with bank guarantee or letter of credit is often used to settle the payment for complete sets of equipment, large machinery and large means of transport (aircraft, ships, etc.). ). This kind of products, with large transaction amount and long production cycle, often require the buyer to prepay part of the payment or deposit by remittance, and most of the rest will be paid in installments or late according to the provisions of the letter of credit or guarantee. In addition, remittance is combined with collection, and collection is combined with standby letter of credit or bank guarantee. When we carry out foreign economic and trade business, we can decide which combination form to choose as appropriate. As an important payment voucher in international settlement, bills are widely used in the world. Due to the wide variety and different nature of bills, and the fact that most domestic residents rarely touch foreign bills and lack the ability of pan-discrimination, there are also many risks in the use of bills. Bill risk A. In terms of bill risk prevention, we should pay attention to the following points: 1. Be sure to know the customer's credit status before trading, so as to be aware of it and prevent problems before they happen. Especially for those new customers with unknown credit information and those customers with tight foreign exchange, backward regions and unstable national situation. 2. Bills submitted by merchants must be reviewed by banks in advance to ensure the safety of foreign exchange collection. Before the transaction is concluded, the buyer and the seller must sign a reliable, equal and mutually beneficial sales contract. 4. Before the bank has received the ticket, you can't deliver the goods too early, so as not to empty the payment. Even if you receive a check from the most creditworthy bank in the world, it doesn't mean that you will definitely receive the payment in the future. In recent years, cases of fraudulent use of forged bills and remittance vouchers by foreign unscrupulous businessmen have occurred frequently in China, and the number of cases is on the rise, which should not be taken lightly. B. Risks and prevention of bills of exchange In the process of using bills of exchange, in addition to the above points, we should also pay attention to the principles that must be observed in issuing, accepting and using bills of exchange: 1 The unit that uses the bill of exchange must be a legal person who opens an account in a bank; 2. The issuance of bills of exchange must be based on legal commodity transactions, and it is forbidden to issue bills of exchange without commodity transactions; 3. After the bill is accepted, the acceptor, that is, the payer, has the responsibility to pay the fare unconditionally; 4. Except for the discount to the bank, the draft shall not be circulated and transferred. (Note: This provision has been broken by later bank settlement methods). C. How to distinguish between genuine and fake promissory notes 1. Real promissory notes are printed on special paper with good paper quality and certain anti-counterfeiting measures, while fake promissory notes can only be printed on ordinary paper with poor paper quality in the market, which is generally thinner and softer than the paper used for real promissory notes. 2. The ink formula for printing genuine promissory notes is confidential and it is difficult for fraudsters to obtain it. Therefore, it can only be printed with ink with similar colors, so that the face color of fake promissory notes is different from that of real promissory notes. 3. The numbers and fonts of genuine promissory notes are standardized and neat, and some fake promissory notes have irregular numbers and fonts and uneven intervals. Because it is illegally printed, the signature on the fake promissory note must be false, which is inconsistent with the reserved signature held by the bank.