Trade Documents-Finance Documents

In international trade, quite a few finance documents are used to ensure that the exporter receives full and timely payment for the shipment.These documents are usually issued by Banks or exporters.As some of documents have already been discussed about their functions and varieties in the former chapters, the subsequent discussion will be mainly about the details that should be contained in these documents,followed by some sample:

*Application Form for International Money Transfer
When Cash in advance or Open Account is used, payment may be effected by Transferring money through banks.Thus, the overseas buyers need to complete the relevant Application Form of International Money Transfer.This kind of form is essentially a request to a bank to make an international money transfer on the remitter's behalf.In others words,an overseas buyer instructs a bank in the buyer's country to transfer an amount of money to an exporter's bank by M/T,T/T or D/T.A sample of an application form for M/T is included at the end of this occation.

*Drafts (including Banker's draft and Commercial Draft and Sight Draft and Time Draft)
In the collection method of payment for goods, the exporters use the banking system to send the buyer a draft to get paid.In other words, the exporter uses a draft to draw on the overseas buyer.,for the sum agreed as settlement in the export contract.By using a draft with other shipping documents through the banks system,an exporter can ensure greater control of the goods,because until the draft is paid or accepted by the overseas buyer, the goods cannot be released.

*Application for Documentary Letter of Credit(跟单信用证）
An Application for Documentary Letter of Credit is the form used by the buyer to request the back to open a Documentary Letter of Credit in favor of the seller.It is used to authorize a back to open a Letter of Credit.
The following information is always required in the form:
1.Method of advice : airmail/cable
2.Type of credit :whether the L/C is irrevocable or revocable.
3.Date of Expiry
4.Applicant's name and address
5.Beneficiary's name and address
6.Advising/Paying/confirming Bank
7.Amount
8.Drafts presented under the credit must be presented for payment/negotiation/acceptance
9.Allow partial shipment/transshipment or not
10.Port of shipment and port of discharge
11.Trade terms
12.Description of goods (quality,quantity,packing etc.)
13.Unit price
14.Documents required
15.Additional conditions
16,Bank charges
17.Signature

*Letter of Credit
As one of the most important finance documents used in international trade,accuracy in the contents of L/C is of vital importance.Usually,an exporter will be advised of the opening of L/C well before the shipment, so that he could have enough time to check the details contained in it.The details listed below are the ones that require special attention when an L/C is opened by the buyer or Checked by the seller.

1.Method of advice: airmail/cable
2.Type of credit: whether the L/C is irrevocable or revocable
3.Date of expiry
5.Documents required
6.Applicant's name and address
7.Beneficiary's name and address
8.Advising/paying/confirming bank
9.Amount
10.Drafts presented under the credit must be presented for Payment.negotiation/acceptance
11.Allow partial shipment/transshipment or not
12.Port of shipment and port of discharge