|TOPIC 1: WHAT IS IMO? WHY IS IT A QUICK AND INEXPENSIVE WAY TO SEND MONEY ABROAD OR EFFECT PAYMENTS FOR FOREIGN TRADE?
IMO is the abbreviation of International Money Order. It is a quick and inexpensive way to send money abroad. If you want to send money abroad (in amounts up to £500 or U.S. $1,000), ask for a Barclays International Money Order.
For a small service charge you can obtain one from most branches of the Barclays Group and mail it direct abroad to pay accounts or subscriptions or to send a cash gift to a relative or friend.
Barclays International Money Orders are simple to buy, convenient to use, and are accepted by major banks throughout the world. Easily refunded or replaced if lost.
The I.M.O. is convenient because it is completed on the spot it is handed to you personally and you post it yourself, thus eliminating delay.
All of the banks providing encashment facilities for I.M.O.s have been supplied with a sticker for display on outside windows and inside on the teller's counters, but he may well find other banks willing to accept I.M.O.s.
Major banks throughout the world will negotiate I.M.O.s either for cash against suitable identification or for deposit to an account.
Banks will generally negotiate the I.M.O. at the prevailing rate of exchange for that day and will usually levy a small commission charge to cover their expenses.
A) WHERE I CAN GET IT?
I.M.O.s may be purchased at most offices of the Barclays Group where a counter official will complete an application form on your behalf.
B) WHAT SHOULD I DO WHEN I LOSE AN IMO?
`Provided the purchaser is able to satisfy certain simple conditions, an immediate refund up to £100/U.S.$250 may be obtained, any balance being repaid within a very short period.
You can buy an International Money Order at most banks branches. You ask for a request form (or application form). The bank official will complete this form for you at the counter. He will ask you how you want to pay for the I.M.O. You can pay in cash, by cheque or by debit to your account. The I.M.O. is usually paid in sterling and US dollars. If you want to make payment in another currency, it is better to ask your bank for an alternative method.
You must fill in another form if you are sending the I.M.O. to a beneficiary outside the 'Scheduled territories'1. This is necessary because the Exchange Control Act (1947) demands it. Exchange Control Regulations are different for countries in the Overseas Sterling Aiea2. Beneficiaries in these areas can receive cash gift allowances of £1,000 but not more. Beneficiaries in countries outside the Overseas Sterling Area and the Scheduled territories (excluding Rhodesia) can receive not more than £300 in cash gifts. If you wish to make payments above these limits, you must ask the Bank of England, through your local branch.
When the bank completes the I.M.O., the bank official will hand it to you and you can then post it yourself
TOPIC 2: WHAT IS TYPICAL ACCOUNTS DOES A BANK IN VIETNAM OFFER?
In Viet Nam, the typical accounts offered by a bank are current account and deposit account. The big advantage of a current account is that you have a cheque book and you can pay your bills by cheque. You don’t have the risk of carrying cash around with you. The advantage of a deposit account is that your money earns interest, although the rate is usually not very high. You can withdraw money from your current account at any time, but with a deposit account you can must usually give 7 days notice.
2.1. WHAT KIND OF ACCOUNT HELPS ME HAVE A CHECK?
Current account helps you have a check.
2.2. HOW DO YOU KNOW THAT?
I think any textbooks tell me about that. In current account you have a cheque book and you can pay your bills by cheque. You don’t have the risk of carrying cash around with you.
2.3. WHAT ARE THE ADVANTAGES OF THE DEPOSIT ACCOUNT
The advantage of a deposit account is that your money earns interest, although the rate is not usually very high.
TOPIC 3: WHAT IS POSTDATED CHECK?
The postdated check is similar to a normal check. With a normal check, the holder can come to a bank, present the check and withdraw cash on spot. However, with a postdated check, the holder can not withdraw cash on spot. This is because the checking account has run out of money. If you pay for your purchase by check, you must tell the seller the date when he or she can withdraw cash. To recover the check you may request that the funds be transferred from savings to checking account. It is necessary to verify all information about the check before forwarding it to the beneficiary.
TOPIC 4: WHAT ARE ADVANTAGES AND DISADVANTAGES OF USING ATM CARD?
ATM stands for automatic teller machine. ATM is very useful in helping you withdraw cash, and know the information about your account. In addition, it helps you make payments. If you need cash, you don’t need go to bank. You can access your money at an ATM every time of day or night. Also you don’t need carry cash if you go some places which have ATM. So you won’t be in fear of steal. Although your ATM card is stolen, your money is safe because the criminal would need your PIN to access your funds.
However, it has some disadvantages. Sometimes the dispenser withholds your card. And you also need carry cash because not that there are ATMs everywhere. Moreover, in our country, most of ATM cards allow you to withdraw limited money during the day. If you need withdraw more, you must go to the bank. There are some secure problems such as: the ATM card can be faked, make a loss for banks and users.
TOPIC 5: WHAT IS WIRE TRANSFER? DESCRIBE WHAT YOU SHOULD DO TO MAKE A WIRE TRANSFER AT THE BANK?
A wire transfer is a way of sending money to a friend abroad. You can pay by check or cash. If you have an account with a bank you can withdraw it from your account. In this case you must fill out a withdrawal slip. You must also fill in the amount and pay for some fee in the withdrawal. To make a wire transfer you must fill out a form for your wire transfer. In the form you must give where you want to send money, what the name and address of the bank is to which you would like to send the money. Then you fill in with who the recipient is. Once you send it, your friend should be able to pick it up within the hour, assuming the bank is open. If your friend’s bank is closed by non, she’ll be able to pick it up first thing tomorrow morning. Your friend will have to identify herself to the satisfaction of the local bank. If your fiend doesn’t pick it up, the local bank will hold the money until she comes in. if she doesn’t come in within a couple of days, they’ll notify her that it’s there.
You must pay for some fee for the expenses to cover your wire transfer.
Your friend sometimes have to pay for some charge for the service which is not much. Finally, they give you a receipt.
Thus, wire transfer helps you send money to a person abroad and ever pay for a delivery in foreign trade.
TOPIC 6: WHAT IS A L/C? NAME SOME OF COMMON L/C? WHY IS L/C IMPORTANT FOR INTERNATIONAL BUSINESS?
The Letter of Credit (its abbreviation is L/C) is essential in the finance of international trade. It is a reliable and safe method of payment and it protects the seller as well as the buyer. The seller (or exporter) needs the Letter of Credit because the buyer maybe a new customer and the exporter may know nothing about his credit status
Come common L/Cs are revocable, irrevocable and confirmed letter of credit. The revocable L/C means that the buyer can cancel the credit. On the other hand, irrevocable L/C means that the buyer cannot cancel the credit. The latter is safer for the exporter because it is certain that the payment is effected by the issuing bank. When the seller doesn’t know anything about the buyer, a confirmed L/C is requested. The confirmed L/C means the advising bank confirms the L/C and is responsible for payment on behalf of the buyer.
In conclusion, the L/C is very important for international business. It will help the exporter and the importer know how to make payment in the international trade and protect their right in transaction.
WHAT KIND OF L/C THE MOST FAVORABLE FOR THE EXPORTER?
The confirmed irrevocable L/C is the most favorable for the exporter because payment is guaranteed by the issuing bank to pay on behalf of the buyer and the advising bank. Payment may be the most concern of the exporter. In this case, the buyer can not cancel the credit. So the payment is certain
When the seller doesn’t know anything about the buyer, a confirmed L/C is requested. The confirmed irrevocable L/C is the safest for the seller because payment is guaranteed by issuing bank and the advising bank
Thus confirmed irrevocable L/C is the most favocable for the exporter because the payment is certain
WHY IS L/C POPULAR IN FOREIGN TRADE?
A Letter of Credit is a very important document in international trade. Because it is a reliable and safe method of payment and it protects the seller as well as the buyer. In foreign trade, the buyer and the seller live in 2 different countries. They are very far away from each other, and any dispute arising may cost a lot of money and time. L/C is considered a safest way for not only the buyer but also the seller. For the buyer, letter is also safer because he or she is ensured of delivery. The bank will hold the shipping documents until the buyer performed his or her duty. In particular, he must accept the draft or pay immediately.
For these and many other reasons, the Letter of Credit is an essential document in international finance.
The importer or buyer opens the L/C. Often the buyer must fill out an application form and submit it to the bank. The bank that is issue the L/C is located in the buyer’s country
WHAT IS DOCUMENTARY CREDIT?
Documentary credit is another name of L/C. The advising bank asks the seller to present the shipping documents if the seller wants to get paid. The documents needed include B/L, Commercial Invoice, Insurance Certificate, Certificate of origin, Certificate of fumigations, packing list, and so on.
The bank that issues the L/C is located in the buyer’s country. The issuing bank will be in charge of payment on behalf of the buyer. The issuing bank will also ask the correspondent in the seller’s country to inform the seller of the L/C opening.
WHAT ARE THE COMMON METHODS OF PAYMENT BESIDES THE L/C?
The common methods of payment besides the LC are: transfer, collection, …
TOPIC 7: HOW DO YOU DISTINGUISH BETWEEN TRAVELERS CHECK AND EUROCHEQUE?
The Eurocheque scheme is very convenient for travellers. It helps Eurocheque card holders by giving them an opportunity to cash cheques in thirty-five European countries. This means that you can use your cheque book all over Europe, although you will need some cash on arrival in other countries to pay for taxis and other small charges.
You can cash up to £30 if you have a Barclaycard, for example, although there is a higher limit of £50 if you use it in the UK. Most banks in Europe ask you for additional identification in the form of a passport. You must sign the cheque in the presence of the cashier, who will then look at your Eurocheque card and your cheque to see if the signatures are the same. The cashier will calculate the amount of cash to give you at the current rate of exchange, and give you the cash in the denominations you ask for. This convenient over the counter service saves a lot of time.
In conclusion, besides the obvious advantages, banking systems in the world still try to overcome some didvantages to make Eurocheque system and travellers cheque ( more convenient and beneficial ) better
CAN YOU TRANSFER A CHECK TO ANOTHER PERSON? HOW DO YOU DO SO?
A cheque is a document that orders a payment of money from a bank account. The person writing the cheque, the drawer, usually has a current account, or checking account where their money was previously deposited. If you want to transfer the check to someone else you could use a special endorsement that says, "Pay to the order of (the name of the person you are giving the check to)" with your signature. You don’t need to endorse the bearer cheque, the one who holds the bearer cheque can cash your account.
TOPIC 8: DESCRIBE A PROCEDURE FOR A LETTER OF CREDIT
A L/C is very important document in the international trade. The seller must send a B/L, an
Firstly, the buyer (or importer) asks his bank to "issue" or "open" a Letter of Credit. He has ordered goods, the seller (or exporter) has sent an invoice to show details of the cost, and the buyer instructs his bank to issue the Letter of Credit in favour of the seller for the amount of the purchase. There is usually a special application form which the seller fills in and sends to his bank.
Secondly, the buyers instruct their bank to issue the Letter of Credit through their agent or correspondent bank in the seller's country or city.
Thirdly, the buyer's bank writes to its agent in the seller's country, giving instructions about the amount of the credit, the beneficiary, the currency, the documents required, and other special instructions. The seller hands in the documents against payment. (The bank will not issue the credit unless the shipping documents arc presented.)
Finally, the agent bank writes to the seller, informing him that a Letter of Credit has been issued in his favour. The Letter of Credit is now "confirmed", that is a bank in the seller's country provides the credit for the seller. . If there is an agreement between the seller and the buyer, a Bill of Exchange can be accepted by the agent bank. This Bill of Exchange can be for 30, 60, 90 days, and gives the buyer credit for a short time. If the seller submits a Bill of Exchange, he will do so against acceptance.
In conclusion, a Letter of Credit is the most suitable method of payment between buyers and sellers who have not done business with each other before.
AS A BUYER CAN I CANCEL THE LETTER OF CREDIT?
It depend on what kind of L/C opened by the buyer. The buyer can cancel if the L/C revocable. But for the irrevocable, he cannot.
Is the LC negotiable or not negotiable? How do you know that?
Yes. By endorsing. There is the beneficiary in the LC.
TOPIC 9: WHAT IS A CHEQUE? CAN YOU USE CHEQUES TO PAY GOR GOODS THAT YOU IMPORT?
A cheque is a document that orders a payment of money from a bank account. The person writing the cheque, the drawer, usually has a current account, or checking account, or chequing account where their money was previously deposited. The drawer writes the various details including the money amount, date, and a payee on the cheque, and signs it, ordering their bank, known as the drawee, to pay that person or company the amount of money stated.
Cheque and Bank Draft
In exporting to the offshore countries, payment by cheque and bank draft occur more often in a small order, ranging from a few hundred to a couple of thousand U.S. dollars. Cheques and bank drafts are often used in open account and consignment trade arrangements.
Both large and small companies may default in their payments, regardless of the amount involved. In times of economic uncertainty, both large and small companies may go out of business. It is important to receive the cheque or bank draft before releasing the shipment. Unless the integrity of the importer is known, it is very important to wait until the cheque or bank draft has cleared before the shipment. International clearing of cheques and bank drafts takes 3 to 4 weeks usually (except in a sight draft with a paying bank in the seller's country).
Not all cheques and bank drafts are genuine, and not all genuine cheques carry a cash value (please refer to the Fly-By-Night Importers for related information).
Trade Arrangements Using the Cheque and Bank Draft
In an open account trade arrangement, the goods are shipped to a buyer without guarantee of payment. Quite often, the buyer does not pay on the agreed time. Unless the buyer's integrity is unquestionable, this trade arrangement is risky to the seller.
In a consignment trade arrangement, the seller ships the goods to the buyer when there is no purchase made. The buyer is obliged to pay the seller for the goods when sold. The seller retains title to the goods until the buyer has sold them.
Cash In Advance (CID)
The cash in advance, which is the safest term of payment, most often is effected using the cheque or bank draft. In some cases, the CID term is paid using the telegraphic transfer (T/T).
TOPIC 10: WHAT IS AN INVOICE? DESCRIBE A PRODURE FOR ISSUING AN INVOICE
- An invoice is a document which gives details of the quantity, the description, the value per unit and the total value of goods which are despatched from a seller to a buyer. In addition, discounts are often included. (In home, or domestic trade the Value Added Tax must also be included, and invoices now have a V.A.T. registration number).
- The invoice is a printed form with the seller's name and address, telephone, telegraph and telex number. The seller writes the name and address of the buyer on the invoice.
- An invoice sent to a buyer is a bill which tells the buyer the exact amount he must pay. It can also be a form of an advice note, it may give details of the cost for information only, or it may be a statement of costs which must be paid before the goods are delivered.
An invoice which is signed by the seller and an official from the importing country's embassy or consulate is called a consular Invoice. This invoice is very often used for customs authorities in the importing countries to make sure that the customs duty is paid. It is also used to help clear a consignment through customs, to avoid a lengthy inspection and a long delay. When the invoice is made out, a copy is sent to the Packing and Despatch Departments, and the Accounts Department retains a copy. They fill in the columns for price and total value.
These details must be accurate, as the invoice is the basis for the Bill of Lading, and the exporter must submit these two documents, the Export Invoice and the Bill of Lading to a bank for payment.
TOPIC 11: HOW DO YOU DISTINGUISH AMONG A COMMERCIAL INVOICE, A CONSULAR INVOICE AND PRO-FORMA INVOICE?
- An invoice is a bill, that is, a demand for payment. It can also be a statement, a regular notice of a buyer's account with a seller. The statement invoice is for buyers who have an open account with sellers, and is often sent monthly or quarterly. In a statement each invoice is a debit entry, and each payment by the buyer is a credit. There is a separate column in an invoice for the quantity of goods despatched, the description of the goods, the price per unit, and the total value. In the statement there is one each for debit and credit entries, and for the balance.
- A Pro-Forma Invoice is like an ordinary invoice, except that it is sent to the buyer for information before he buys, or for payment before the seller despatches the goods. If the Pro-Forma Invoice is for information, it is a form of quotation, a description of price and costs to help the buyer to decide.
- An invoice which is used in international trade and includes the cost of freight and insurance is called a Commercial or Export Invoice. This is one of the shipping documents and is very important for banks, customs, and shipping.
- An invoice which is signed by the seller and an official from the importing country's embassy or consulate is called a Consular Invoice. This invoice is very often used for customs authorities in the importing countries to make sure that the customs duty is paid. It is also used to help clear a consignment through customs, to avoid a lengthy inspection and a long delay. When the invoice is made out, a copy is sent to the Packing and Despatch Departments, and the Accounts Department retains a copy. They fill in the columns for price and total value.
These details must be accurate, as the invoice is the basis for the Bill of Lading, and the exporter must submit these two documents, the Export Invoice and the Bill of Lading to a bank for payment.
TOPIC 12: WHAT IS A BILL OF LADING? WHY IS IT AN IMPORTANT DOCUMENT IN A FULL SET OF THE SHIPPING DOCUMENTS?
. As you was aware the Bill of Lading is a receipt signed by the captain of the ship for the cargo he has received on board. This is called a 'shipped' Bill of Lading. This Bill of Lading states that the captain has inspected the goods after loading, and gives the following details:
the name of the shipper, the name of the ship, the consignee, the port of loading, the port of discharge and the marks and numbers
'shipped' Bills of Lading is usually required for credit transactions. And it has some kind of B/L: a clean or unclean B/L
A Bill of Lading is a negotiable document. An buyer can endorse the Bill of Lading and sell the goods in this way, even before they arrive. A Letter of Credit may demand that the Bill of Lading should be made out 'to order' and endorsed 'in blank'. This means that the sellers place no restrictions on the right to transfer ownership.
Many ship owners print their own Bills of Lading, and not all look alike. There are usually three or four copies. One of the copies is kept by the shipping company, and the other copies are sent to the exporter.
The Bill of Lading is also an essential document in international trade and shipment. It is important in law, in finance, and in insurance.
It is important in law because it is the legal title to ownership of the goods. If an importer holds the Bill of Lading, he can lake possession of the goods printed on it. The buyer can get his goods only when he presents the Bill of Lading to the shipping company when the ship arrives.
In finance, the Bill of Lading is usually handed to the bank, together with the Export Invoice and the Certificate of Insurance, before the bank will issue credit or accept a Bill of Exchange. The consignor sometimes demands payment before he hands the Bill of Lading to the buyer or his bank.
In insurance, the Bill of Lading states whether the goods have been inspected on board ship by the Captain of the ship. This is important in deciding who is responsible or liable for any damage to the cargo.
Thus, when you are an importer or an export it’s need for you to use B/L in your trade.
THE MARKS AND NUMBERS INCLUDE:
The type of packing
The description of the goods
WHAT’S A 'CLEAN' BILL OF LADING OR 'UNCLEAN' B/L?
A 'clean' Bill of Lading means that the shipowners agree that the goods were received on board in good condition. If the goods are not in good order and condition, the Bills of Lading are described as 'dirty', 'unclean', or 'foul'.
WHY A LETTER OF CREDIT MAY DEMAND THAT THE BILL OF LADING SHOULD BE MADE OUT 'TO ORDER' AND ENDORSED 'IN BLANK'?
An buyer can endorse a Bill of Lading by signing across the back. In this way, ownership of the goods can be transferred to another buyer simply by handing the endorse Bill of Lading to him. A Bill of Lading can state that the goods must be delivered to a certain person or company, or it may state 'to order'.
HOW DOES THE IMPORTER RECEIVE THE CONSIGNMENT?
The master of the vessel signs the Bill of Lading and the ship owners retain a copy. The other copies are sent to the exporter. He will then send a copy to the bank either for payment or for acceptance of a Bill of Exchange. If there is a regular trade between seller or buyer, the seller will draw on the buyer's credit, and send copies of the Bill of Lading by separate mails make sure he receives at least one. The buyer can then present the Bill of Lading to the shipping company at the port of discharge, and can take delivery of the goods.
For example, the suppliers, Whiteleaf Ltd., arrange for the shipment of 1,500 cassette tapes. Companies often do this through forwarding agents. When these arrangements are completed, they receive the Bill of Lading from the captain of the ship which transports the goods.
TOPIC 13: HOW DO YOU WRITE A LETTER OF COMPLAIN? HOW DO YOU WRITE A REPLY TO IT?
If you want to write a letter of complaint the first, you can write your name and address at the top right hand corner in the letter, write date of letter at the top left corner and company’s name and address that you will complaint under the date. Secondly, you write the salutation, example: Dear sirs/Madams. Next, you can write number of order or number of insurance contracts … in the letter and then you may complaint about problems which company or products made you unpleasant. You should explain wrongs clearly and say what you want them to do to solve problem. Remember to enclose the documents if possible. The end letter by sentences as “I look forward to hearing from you soon” .The final is complimentary and sign.
A reply for the letter of complaint
The first, you can write your company’s name and address at the top right hand corner in the letter, write date of letter at the top left corner and receiver’s name and address under the date. Secondly, you write the salutation, example: Dear Mr. Join… because you are known his name in letter of complaint. Next, you can write your reference number or company. Then, you should thank him because he indicated your wrongs or your company to make good your shortcomings. Besides, you don’t forget to apologize and promise that you will solve matter with satisfactory result for receiver. Then you express methods to negotiate with customer. The final is the end complimentary and sign.
TOPIC 14: HOW DO YOU WRITE AN ENQUIRY AND A REPLY TO IT?
- All business letters have two principal functions:
a To ask for and to give a reply to an enquiry, announcement, offer, order or complaint in the briefest and clearest way.
b To keep a record of all the important facts included in the correspondence.
A business letter should also give the recipient the impression that the writer knows what he is doing, that he is efficient and clear-headed. This can be achieved by stating your enquiry briefly, with clear wording and no unnecessary phrases, and by the use of accurate reference numbers, dates and specifications. Simplicity and brevity help tire writer as much as the recipient, and will probably mean an earlier reply. A confused, over-long and unclear letter may be left waiting until someone explains its meaning, and this may mean delays.
A first letter of enquiry should be brief and simple. This type of letter is often written to suppliers you have not done business with before. The letter of enquiry often asks for a brochure, catalogue or price-list. It is sometimes considered useful to give some details of your business, and also where or how you heard of the supplier's name and address.
You should always address your letter 'Dear Sirs'. In this way you are writing to the company. The letter receives attention if you address it to the company.
If you address it to an individual, your letter may have to wait while he is away. Or you may make a mistake and address it to the wrong individual, and this will also mean delay.
The salutation is always 'Dear Sirs'.