Remittance & Collection 汇款 托收 Settlement classified : Remittance顺汇: The buyer takes the initiative in remitting money to the seller through a bank Reverse Remittance 逆汇 Collection, Letter of Credit Remittance Remittance means the cross-border direct transfer of funds by banks. The remitting bank pays a predetermined amount on the request of remitter (importer) through the foreign correspondent bank or agent bank (paying bank) to payee/beneficiary (exporter) . Three basic ways for a bank to transfer funds for its client from the home country to abroad. telegraphic transfer TT mail transfer MT demand draft DD T/T is to transfer funds by cable / telex / SWIFT sent by a remitting bank, at the request of the remitter. It instructs the paying bank to pay a certain sum of money to the beneficiary. Workflow of T/T M/T Differences between M/T and T/T in the following steps : P48 Step 1: Agree M/T as method of payment; Step 2: Choose M/T on application; and Step 4: The remitting bank sends payment order to the paying bank via airmail Remittance by banker’s demand draft (D/D) The remitting bank at the request of the client draws a banker’s draft on its overseas branch or its correspondent bank abroad ordering the latter to pay on demand the stated amount to the holder of the draft. It is often used when the client wants to transfer the funds to the beneficiary by himself. Please identify the drawer, drawee and payee of the draft under D/D (4)Remittance by cable / telex / SWIFT ---Telegraphic Transfer (T/T) Reimbursement of remittance 汇款偿付P49 The settlement between remitting bank and paying bank Credit your A/C with us 主动贷记（汇入行在汇出行有账户） Debit our A/C with you 授权借记 Authorize Bank X to debit our A/C and credit your A/C with them 共同账户行 Instruct Bank X to pay the proceeds to your account with Bank Y Comparison of T/T,M/T,D/D T/T: fastest, most expensive, most reliable form of money transfer because it depends on the inter-bank transfer system M/T: slow, not very expensive, less reliable because the mailed M/T or payment order could be delayed. D/D: slowest, least expensive, less reliable because the customer should bear the risk of theft, destruction or loss of the draft in transit 3. 2. Collection（URC522） Collection means the method for handling financial and commercial documents by banks in accordance with instruction from principal in order to: obtain payment and/or acceptance; deliver documents against payment and/or against acceptance Four main parties to a collection transaction 权利义务 P53 the principal (seller / exporter / drawer) the remitting bank (principal’s / seller’s / exporter’s bank) the collecting bank the drawee (buyer / importer) Other parties : the presenting bank the representative in case of need Legal positions of Banks URC522 Duties of remitting banks Verify the documents May choose collecting bank Act in good faith and exercise reasonable care Collection is a type of reverse remittance settlement on commercial credit basis. Duties of collecting banks Handles the collection according to collection instruction Verify the documents Advise the importer on the arrival of documents Release documents only after full payment is received (D/P), or acceptance is obtained (D/A) When the collection is dishonored, act according to collection instruction Timely transfer of the funds collected Types of Collection (1) Clean Collection Clean collection means collection of financial documents not accompanied by commercial documents. In most cases the financial document used is a draft. Clean collection is generally used for commissions, sample fees, and other charges. (2) Documentary Collection Documentary collection means collection of commercial documents which may or may not be accompanied by financial documents. The necessary commercial documents are the documents of title to the goods, such as the bill of lading. Workflow of documentary collection P57 Depending on the tenor of payment of the draft, the principal instructs the collecting bank to release the title documents to the importer against payment of a sight draft (D/P) or acceptance of a time draft (D/A) . D／P 付款交单条件 In D/P terms the collecting bank releases the title document to the importer only upon a full and immediate cash payment of the sight draft. (D/P AT SIGHT, D/P AT XX DAYS AFTER SIGHT) D／A 付款交单条件 In D/A terms the collecting bank can release the title document to the importer as soon as he accepts the term bill promising to pay at a later date as stipulated on the draft (usually 30, 60 or 90 days). If you were an exporter, which term would you prefer, D/P or D/A? What if you were an importer? P57 DP is safer for the exporter. DA offers less security to the exporter. The risk with a D/A collection is that the documents and therefore the goods are released on acceptance with no guarantee that the payment will be forthcoming at maturity. Usance D/P远期付款交单 The collecting bank holds the accepted draft and waits to maturity date to present it to importer for payment. This is a hybrid of D/P and D/A. An exporter stipulates that title documents are to be released only on payment of an accepted draft. It is safer to exporter than D/A. Letter of Instruction for outward collection All documents sent for collection must be accompanied by collection instructions. Since banks act only as an agent, they effect what the drawer instructs. Collection Order 3.3 Practices of Remittance and Collection 汇款： (1) Payment in advance (cash in advance)预付 P59--进口商负担重 The importer may pay the exporter at some agreed stage prior to dispatch /delivery of goods by using means of remittance through banks. Cash with order Payment at least XX days before shipment Payment within XX days after shipment, shipping documents released upon 100% payment received by the seller 风险: 付了钱 货物不符 减少风险：争取机会付款前对货物检查，采用FOB (2) Open Account (O/A) 到付---出口商负担重 Open account business is also called payment after arrival of goods, under which the exporter delivers goods to the buyer who remits in due course or at agreed intervals the agreed price through banks. 风险: 钱货两空 减少风险Methods to reduce the risks：与银行保函相结合 办理出口信用保险 保理 包买票据+采用CIF CIP+预付定金+要求担保+注意抬头做法，及时转卖或运回货物 其他用途：Remittance is used for payment of small percentage of contract value, and commonly used to pay commissions, advertisements and miscellaneous expenses. 汇款优缺点：买卖双方只是商业信用 银行起中介作用 资金负担不公平 ---- 速度快 费用低 灵活方便 托收： 对出口商: D/P即期付款交单风险最小 D/A风险最大 The advantages of collection The exporter can avoid the risk of losing goods without receiving payment in D/P, or can obtain an assurance in D/ A The settlement expense is relatively low comparing to L/C (only a little more than remittance). The importer gets partial financing in D/P and complete financing in D/A. The exporter’s risks in collection 1. Non-payment or non-acceptance of draft The importer cannot obtain the goods without payment (D/P) or acceptance (D/A) But the physical goods are at the overseas port, in danger of being damaged or stolen, and possibly incurring additional charges To overcome this problem, a store and insure clause should be incorporated on the collection order. The exporter can also insert a representative in case of need. 2. Nonpayment of trade acceptance 拒付 With prior agreement, the collection order may request the importer’s bank guarantee payment (acceptance pour aval) 3. Risks associated with usance D/P Careful calculation of due date for payment Flexible payment date enabling payment before due date or partial payment 出口方收款人的风险：1进口方付款人破产、倒闭或失去偿付能力；2出口方收款人提供的货物的数量、质量等与合同规定不符，进口方付款人拒绝履行付款义务；3进口地货物价格下跌产生不利于货物情形，进口方拒付或承兑，甚至承兑到期付款后仍拒付 进口方付款人的风险：1承兑后，凭单据提取的货物与合同不符；2.在远期付款交单下，承兑了汇票后，到期不能从代收行取得单据，但自己却已经承担了到期付款的责任。 风险防范：事先调查进口方付款人的资信状况和经营作风；了解出口商品在进口国的市场行情；熟悉进口国的贸易管制和外汇管理方法；要了解进口国银行的习惯做法；使用适当的价格术语，争取出口方收款人办理保险；办理出口信用保险 Case Study 上海Textiles Import and Export Co. 向英国伦敦的一个出口商（Tom & Joans Co.）购买了价值100万美元的商品，双方约定D/A 托收结算，货物装运后一个月付款。出口商于2012年7月1日装运了货物，并于7月3日开立汇票并将整套单据交到Barclays Bank Inc. 委托银行进行托收。Barclays Bank Inc.在完成出口托收操作后向Bank of China, Shanghai Branch 寄出单据。请据此开立一张用以结算的汇票. 以托收行为收款人。 1. Identify the four main parties in this transaction. 2. Which collection method is more favorable for the exporter, D/A or D/P? Why? 本文来源：https://www.wddqw.com/doc/0c2d64fa83eb6294dd88d0d233d4b14e85243e39.html