1 Introduction 1
1.1 The term"International Settlement" 1
1.2 Why should we study this course in English? 2
1.3 The meaning of international settlement 2
1.4 The evolution of international settlement 4
1.4.1 From cash settlement to non-cash settlement 4
1.4.2 From direct payment to indirect payment 5
1.4.3 From simple price terms to complex price terms 6
1.4.4 From paper documents to electronic documents 8
1.5 Main methods of international settlement 14
1.5.1 The players and their roles 14
1.5.2 Factors in the payment decision 15
1.5.3 Types of payment techniques 16
1.6 Related international customs and practice 21
1.7 Correspondent banking relationship 22
1.7.1 Banking institutions 22
1.7.2 The establishment of a correspondent banking relationship 25
2 Negotiable instruments 30
2.1 General introduction 30
2.1.1 What is a negotiable instrument? 30
2.1.2 Characteristics of negotiable instruments 30
2.1.3 Functions of negotiable instruments 32
2.1.4 Negotiable instrument laws 33
2.1.5 Parties to a negotiable instrument 34
2.1.6 The relationship of the parties to a negotiable instrument 38
2.2 Bills of exchange 40
2.2.1 What is a bill of exchange? 40
2.2.2 Essential items required in a bill of exchange 41
2.2.3 Acts relating to a bill of exchange 49
2.2.4 Classification of bills of exchange 68
2.3 Promissory notes 69
2.3.1 What is a promissory note? 69
2.3.2 Essential items of a promissory note 70
2.3.3 Joint and several notes 71
2.3.4 Differences between a bill and a note 73
2.3.5 Types of notes 74
2.4 Cheques 75
2.4.1 What is a cheque? 75
2.4.2 Essential items of a cheque 76
2.4.3 Types of cheques 76
2.4.4 Differences between a bill and a cheque 80
3 Remittance 81
3.1 What is a remittance? 81
3.2 Basic parties to a remittance 81
3.2.1 Remitter 81
3.2.2 Remitting bank 82
3.2.3 Paying bank 82
3.2.4 Payee or beneficiary 83
3.3 Types of remittance 83
3.3.1 Mail transfer 83
3.3.2 Telegraphic transfer 84
3.3.3 Demand draft 84
3.4 Reimbursement of remittance cover 85
3.5 Application of remittance in international trade 87
3.5.1 Cash in advance 87
3.5.2 Open account 88
4 Collection 90
4.1 What is a collection? 90
4.2 Basic parties to a collection 91
4.2.1 Principal/drawer 91
4.2.2 Remitting bank 93
4.2.3 Collecting bank 94
4.2.4 Presenting bank 94
4.2.5 Drawee 95
4.2.6 Relationship between the parties 95
4.3 Types of collection 96
4.3.1 Clean collection 96
4.3.2 Documentary collection 97
4.4 Terms of releasing documents 97
4.4.1 Documents against payment(D/P) 97
4.4.2 Documents against acceptance(D/A) 98
4.5 Direct collection 99
4.6 Procedures of a documentary collection transaction 100
4.7 Banks' liabilities and disclaimers under a collection 101
4.8 Financing provided by banks under a collection 103
4.8.1 Financing provided by the remitting bank to the exporter 103
4.8.2 Financing provided by the collecting bank to the importer 104
4.9 Problems frequently arising from a collection 106
4.9.1 Problems relating to insurance 106
4.9.2 Special collection customs or usages 106
4.9.3 Negative events that may occur to the exporter 107
5 Letters of credit 109
5.1 What is a letter of credit? 109
5.2 Characteristics of a letter of credit 110
5.2.1 A written undertaking on the part of the issuing bank 110
5.2.2 Independent of the sales contract 111
5.2.3 Exclusively dealing with documents 111
5.3 Parties to a letter of credit 112
5.3.1 Applicant 112
5.3.2 Issuing bank 112
5.3.3 Beneficiary 113
5.3.4 Advising bank/transmitting bank 114
5.3.5 Confirming bank 114
5.3.6 Paying bank/accepting bank 115
5.3.7 Negotiating bank 116
5.3.8 Claiming bank 116
5.3.9 Reimbursing bank 117
5.4 Procedures of a documentary credit operation 117
5.5 Contents of a letter of credit 125
5.6 Examination of a documentary credit 129
5.7 Types of credit 139
5.7.1 Revocable credit 139
5.7.2 Irrevocable credit 140
5.7.3 Confirmed irrevocable credit 140
5.7.4 Sight payment credit 142
5.7.5 Acceptance credit 142
5.7.6 Deferred payment credit 144
5.7.7 Negotiation credit 145
5.7.8 Straight credit 146
5.7.9 Anticipatory credit 147
5.7.10 Transferable credit 149
5.7.11 Back-to-back credit 150
5.7.12 Revolving credit 150
5.7.13 Reciprocal credit 152
5.7.14 Standby credit 154
5.8 Financing provided by banks under a letter of credit 154
5.8.1 Financing provided to the exporter 154
5.8.2 Financing provided to the importer 157
5.9 Letters of credit and other payment methods 158
6 Standby letters of credit 161
6.1 What is a standby letter of credit? 161
6.2 Differences between a standby L/C and a commercial L/C 162
6.3 Characteristics of a standby credit 164
6.4 Types of standby credits 165
7 Bank guarantees 168
7.1 What is a letter of guarantee? 168
7.2 Basic parties to a bank guarantee 169
7.3 Direct and indirect guarantees 170
7.4 Types of guarantees 171
7.5 Contents of a bank guarantee 174
7.5.1 Basic contents of a bank guarantee 174
7.5.2 Basic contents of a counter guarantee 175
7.5.3 Additional clauses of a bank guarantee 176
7.6 Procedures of a bank guarantee operation 182
8 International factoring 188
8.1 Origin and evolution of factoring 188
8.2 What is factoring? 190
8.3 Basic parties and procedures of international factoring 192
8.4 Types of factoring 194
8.4.1 Maturity factoring and financed factoring 194
8.4.2 Disclosed factoring and undisclosed factoring 194
8.4.3 Single factoring and co-factoring 195
8.5 Services provided to the exporter by a factor 195
8.5.1 Credit investigation 195
8.5.2 Collection of proceeds 197
8.5.3 Maintenance of the sales ledger 197
8.5.4 Risk protection 198
8.5.5 Payment on account 198
8.6 Legal framework for factoring transactions 199
8.7 The role of factoring in international trade 199
8.8 Factoring and its prospects in China 200
9 International forfaiting 205
9.1 The evolution of forfaiting 205
9.2 What is forfaiting? 208
9.2.1 The meaning of forfaiting 208
9.2.2 Parties to a forfaiting finance transaction 210
9.2.3 Characteristics and documentation of forfaiting 211
9.2.4 Costs of forfaiting finance 213
9.3 The procedures of a forfaiting transaction 215
9.4 Primary and secondary forfaiting markets 219
9.5 Forfaiting vs. other trade financing methods 219
9.5.1 Forfaiting vs. officially supported export credits 219
9.5.2 Forfaiting vs. factoring 220
9.5.3 Forfaiting vs. invoice discounting 220
9.6 Forfaiting in China 221
10 Documents 223
10.1 General introduction 223
10.1.1 Types of doeuments 223
10.1.2 Roles of documents 224
10.2 Drafts drawn under a letter of credit 224
10.2.1 Characteristics of drafts drawn under a letter of credit 224
10.2.2 Examination of drafts drawn under a letter of credit 225
10.2.3 Frequently found discrepancies with drafts 227
10.3 Commercial invoices 227
10.3.1 Contents of commercial invoices 228
10.3.2 Frequently found discrepancies with invoices 229
10.3.3 Other invoices 230
10.4 Bills of lading 231
10.4.1 Basic parties to a bill of lading 231
10.4.2 Main contents of a bill of lading 232
10.4.3 Types of bills of lading 233
10.4.4 Frequently found discrepancies with a bill of lading 237
10.4.5 Other transport documents 239
10.5 Insurance documents 239
10.5.1 Types of marine cargo transport insurance 239
10.5.2 Checking of an insurance policy under a letter of credit 241
10.6 Certificates of origin 246
10.7 Inspection certificate 248
10.8 Other documents 248
11 International customs and practices 250
11.1 An overview 250
11.1.1 Definition and characteristics 250
11.1.2 Creation and development 252
11.1.3 Comparison of some concepts 254
11.2 Rules relating to price terms 257
11.2.1 Warsaw-Oxford Rules 1932 257
11.2.2 Revised American Foreign Trade Definition 1941 257
11.2.3 Incoterms 2000 257
11.3 Rules on ocean bills of lading 259
11.3.1 The Hague Rules 259
11.3.2 The Hague-Visby Rules 260
11.3.3 The Hamburg Rules 260
11.4 Rules,customs and practices related to international settlement 261
11.4.1 URC 522 261
11.4.2 UCP 500 and eUCP 1.0 262
11.4.3 UCP 600 and eUCP 1.1 265
11.4.4 ISP 98 267
11.4.5 URCG 325 268
11.4.6 URDG 458 269
11.4.7 URR 525 269
11.4.8 URCB 524 270
11.4.9 GRIF 270
11.4.10 ISBP 271
11.5 Application of international customs and practices in China 271
Glossary 274
References 284
Postscript 286
后记 289