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Delivery and Payment Methods in Foreign Trade
PAYMENT IN FOREIGN TRADE
1) Advance Payment
It is the form of payment in which the importer pays the price of the goods to the exporter before the actual export. In this form of payment, the exporter does not undertake any risk, while the importer bears the risk of incurring loss due to reasons such as not sending the goods or not complying with the order specifications.
Cash export fees can be collected by money order through banks, by the importer, exporter or third parties declaring that they are acting on their behalf, by check and effectively by credit card if the foreign currency seller is proven to be residing abroad or if it is determined that the credit card has been issued from abroad.
2 Payment Against Goods
It is the form of payment in which the price of the exported goods is paid after the goods are received by the importer. After the exporter has shipped his goods, he sends the documents related to the shipment to the importer through a bank, provided that they are delivered directly or free of charge. It is the payment method in which the exporter assumes the most risk. Since the payment of the price of the goods takes place after the receipt of the goods, there is a risk of non-payment of the price of the goods.
3 Payment Against Documentation
It is a form of payment that allows the delivery of the shipping documents representing them to the importer through the bank in return for payment or acceptance of policies or issuance of bonds, after the exporter has shipped the goods in accordance with the sales contract made with the importer. After the bank collects the export fee, it delivers the documents to the importer.
4) Acceptance Credit Payment
It is a form of payment that undertakes to pay the price of the goods in a certain time and this payment is a policy instrument.
Letter of Credit with Acceptance Credit: In letters of credit opened in accordance with international rules and legislation, it is a form of payment that allows the shipping documents to be paid at the policy maturity by releasing the shipping documents, following the acceptance of the policy presented with these documents by the importer's bank or the correspondent bank.
Document Against Acceptance Credit: It is a form of payment in which the cost of the goods is paid to the exporter on the policy maturity after the bank delivers the shipping documents and the attached policy to the importer following the acceptance by the importer.
Against Goods with Acceptance Credit: It is a form of payment in which the price of the exported goods is paid on the policy maturity after the importer receives the goods and accepts the policy.
5) Letter of Credit Payment
Upon the request and instruction of the importer or on the condition that the terms of the letter of credit of a bank operating on its own behalf are complied with and in return for the submission of the documents stipulated in the letter of credit,
to make payments to or at the behest of the exporter, or to accept and pay the bills of exchange drawn by the exporter, or
authorizes another bank to make such a payment or accept the policies drawn, or
It is an arrangement that authorizes another bank to make a negotiation transaction.
In short, it is a form of payment that undertakes to make a payment to the exporter, in line with the instruction given by the importer, in return for the fulfillment of the conditions requested by the bank where the importer works, up to a certain amount and for a certain maturity, and the submission of documents related to the export of the goods exported by the exporter.
Letters of credit are opened within the framework of the rules in the brochure "Uniform Customs and Practices for Documented Loans-UCP 500" published by the International Chamber of Commerce to ensure uniformity in payments with letter of credit.
DELIVERY IN FOREIGN TRADE
Delivery at the workplace: The seller (exporter) delivers the goods to the buyer (importer) at the workplace (factory, warehouse, etc.) specified in the contract and agreed with the buyer. The place of delivery is in the exporter's country and the delivery takes place without customs clearance related to export. In this form of delivery, the seller's responsibility is to deliver the agreed amount of goods to the buyer at the place and time specified in the contract. After delivery, all responsibilities pass to the buyer. Therefore, the buyer is responsible for export-related customs clearance, transportation and insurance of the goods from the delivery place to the destination, and all costs related to these belong to the buyer. This form of delivery is the one that imposes the least responsibility on the seller and the most on the buyer.
Delivery to the carrier: The seller delivers the goods for which export customs clearance has been made to the carrier specified by the buyer at the place specified by the buyer. The place of delivery is again in the exporter's country. However, in this form of delivery, the seller is responsible for carrying out export customs clearance and delivering the goods intact to the carrier. All subsequent responsibilities belong to the buyer. The buyer pays the cost of transportation and insurance up to the destination of the goods. If the goods are delivered to the vehicle at a place belonging to the seller (workplace, factory, warehouse, etc.), the responsibility of loading the goods belongs to the seller, otherwise the seller is not responsible for loading.
Delivery next to the ship: The seller delivers the goods to the buyer, with the export customs clearance completed.