1. Opening of L/C
L/C is a most vital and commonly-used form of payment in international trade settlement. Based on the requirements listed in the contract, importers request their own banks to issue a L/C for the beneficiaries. For the bank to immediately assume responsibility of guaranteed payment, the exporter only needs to submit shipping documents in compliance with the L/C. This helps alleviate potential conflicts arising from mistrust between importers and exporters, while helping to facilitate financial liquidity among them.
2. Shipment against bank guarantee
Shipment against bank guarantee is a service offering whereby the bank, in the circumstances that the merchandise arrived before the bill of lading or other title documents are in place, produces a letter of guarantee as requested by an importer, undertaking to submit the original B/L in exchange of payment later, and that the applicant guarantees to bear the shipping company’s relevant charges, along with the compensation for possible damages that may arise as a result.
3. Import collection
Import collection is a service offering through which the exporter appoints a collecting bank, then entrusts it or a presenting bank (the exporter’s local bank) with a duty to collect payment from a designated importer. For the importers, the import collection service provided by the bank helps reduce expenses, without the need for them to bear relatively huge credit risks. Hence, it is a relatively beneficial mode of settlement.
4. Settlement under three trade items
The three trading items refer to industrial material processing, assembly of supplied components and processing of supplied product samples. Settlement under three trade items is a settlement mode integrating payment for imports of raw materials and components with the receipt of payment for exported products to be bought back. Without using the country’s foreign reserves, this mode of L/C settlement uses export L/C as collaterals to ensure import L/C payment from importers.