Week 3 Lesson Payment in Advance Open Account

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Week 3 Lesson

Week 3 Lesson

Payment in Advance Open Account (Paid after) § Rare in foreign trade (trust issue)

Payment in Advance Open Account (Paid after) § Rare in foreign trade (trust issue) § Only for regular/reliable § Common in large orders § Two are common for small orders: 1) Cash With Order (CWO) – Importer pays for goods when orders placed 2) Cash On Delivery (COD) – Goods are sent and released only after payment of invoice/delivery customers § Payment made in a specified period after receiving goods § Usually 30, 60, or 90 days after invoice date

Bank Transfer Bill of Exchange/Draft § Most common and fastest § Used as a

Bank Transfer Bill of Exchange/Draft § Most common and fastest § Used as a form of credit for international payments § Importer instructs its bank to transfer to exporter’s bank § SWIFT Code (inter-bank transfer ID code) (payment received after a set period of time) § Drawer, Drawee, Payee (usually drawer) § Before supplying goods exporter stipulates a B/E and send it to importer (drawee) § Sight draft o Fixed date

§ Best security for the exporter § Exporter agrees to supply goods when a

§ Best security for the exporter § Exporter agrees to supply goods when a foreign customer opens a letter of credit with reputable bank (issuing bank) § The L/C is sent to exporter’s bank (advising bank) with all specifications: § Description of goods, time & place of delivery, documentation required, etc. § When documents are submitted to the importer’s bank the credit will be released and the supplier will be paid

Importer: asks their bank to write an L/C in favor of exporter Confused? L/C

Importer: asks their bank to write an L/C in favor of exporter Confused? L/C Transaction Importer’s Bank: pays back exporter’s bank and gives shipping documents to importer Importer’s Bank: sends L/C to exporter’s bank Exporter’s Bank: confirms L/C Importer: gives shipping documents to shipping line and receives goods Exporter: ships goods and receives documents from shipping agent. Gives documents to their bank Exporter’s Bank: if documents are correct sends them to importer’s bank and pays the exporter

- You may need to change the image of the country (ex. Some people

- You may need to change the image of the country (ex. Some people think of India as poor and dirty) - Highlight unique places/aspects of a country (don’t show things that are similar to the readers’ country) - You may need to inform readers about little know places (weather, customs, currency) - If necessary ease any fears

§ Remember who your readers are (think of what they want) § What kind

§ Remember who your readers are (think of what they want) § What kind of tourists do you want? TASK: Write a headline and 100 word copy ad for Italy. Decide who your readers are: - US backpackers (20 -30 years old) - Australian retirees - French families

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Open Security OPEN COMMONSKONGRESS 2014 Open Security OpenOpen Security OPEN COMMONSKONGRESS 2014 Open Security Open