FINANCING INTERNATIONAL TRADE PROFESSIONAL ENGLISH IN USE FOR FINANCE

 

PROFESSIONAL ENGLISH IN USE FOR FINANCE 45. FINANCING INTERNATIONAL TRADE

 

A Documentary credits A company which sells goods or services to other countries is known as an exporter. A company which buys products from other countries is called an importer. Payment for imported products is usually by a documentary credit, also called a letter of credit. this is a written promise by a bank to pay a certain amount to the seller, within a fixed period, when the bank receives instructions from the buyer. B Bills of exchange Another method of payments is a bill of exchange or draft. This is a payment demand, written or drawn up by an exporter, instructing an importer to pay a specific sum of money at a future date. When the bill matures, the importer pays the money to its bank, which transfers the money to the exporter’s bank. This bank then pays the money to the exporter after deducting its charges. C Exports documents Exporters have to prepare a number of documents to go with the shipment or transportation of goods.   EXERCISES 45.1 Are the following statements true or false? Find reasons for your answers in A, B and C opposite. 1 With a letter of credit, the buyer tells the bank when to pay the seller. 2 Letters of credit are only valid for a certain length of time. 45.2 Put the sequence of events in the correct order. The last stage is b. look at B opposite to help you. a A bank accepts or endorses the bill of exchange. b The accepting bank pays the full value of the bill of exchange to whoever bought it. 45.3 Find verbs in A, B and C opposite that can be used to make word combinations with the nouns below. Then use the correct forms of some of the verbs to complete the sentences. 1 Exporters can get paid sooner if a bill of exchange is ______ by a bank. 2 The bill of lading and the insurance certificate both __________ the goods

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