...Assignment On: International Trade Payment and Finance with Special Reference to Bangladesh Course Title: International Business Course Code- BUS 510 Prepared To: Mr. Ahsan Habib Faculty of BRAC Business School. Prepared By: Md. Mahabubur Rahaman Program- MBA ID- 10364038 Section - 1 Submission Date- 24th December, 2011. [pic] Introduction The international trade activities are grown day by day. This trend is attributable to the increased globalization of the world economies and the availability of trade payment and finance from the international banking community. Although banks also finance domestic trade, their role in financing international trade and payment system is more critical due to the additional complications involved. First, the exporter might question the importer’s ability to make payment. Second, even if the importer is creditworthy, the government might impose exchange controls that prevent payment to the exporter. Third, the importer might not trust the exporter to ship the goods ordered. Fourth, even if the exporter does ship the goods, trade barriers or time lags in international transportation might delay arrival time. Financial managers must recognize methods that they can use to make payment and finance international trade so that they can conduct exporting or importing in a manner that maximizes...
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...6.0 INTERNATIONAL TRADE FINANCE Learning Objectives: At the end of the subject coverage learners should be able to: • Explain the ways in which international trade is undertaken, settled and financed; • Identify the types of customers engaged in international trade and their needs; • Explain the features and benefits of services provided by banks and other financial institutions in facilitating international trade; • Explain international payment systems and regulations that are in place and the procedures adopted. CONTENTS 1. Introduction to International Trade Finance • The meaning of international trade. • Major parties in international trade. • Reasons for international trade. • Advantages of international trade. • International trade barriers. • The role of banks and financial institutions in international trade. 2. The Foreign Exchange Market • The meaning of foreign exchange market. • Participants in the foreign exchange market. • Functions of foreign exchange market. • The mechanism of foreign exchange transfer. • Relationship between foreign exchange market and money market. • Systems and procedures for inter bank foreign exchange trading. 3. Exchange Rates • Definition of exchange rate. ...
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...International Business Management Section A: Part One: 1. What is the series consideration for strategy implementation? 2. The major activity in global marketing is: d. All of the above 3. 3. The third „P‟ in the international marketing mix is: d. Place 4. The European Economic Community was established in____________ d. 1957 5. Environment Protection Act on______________ a. 1986 6. People‟s attitude toward time depend on: 7. Culture necessitates adaption of : 8. The legal term for brand is: All of the above 9. FDI flows are often a reflection of rivalry among firms in____________ 10. ISO certification is: d. Both (a) & (b) Part Two: 1. What do understand by „Inward-oriented Policies An inward- oriented policy, usually , means over protection. What is less obvious is that sheltering domestic industries puts exports at a great disadvantage because it raises the cost of the foreign inputs used in their production. Moreover, an increase in the relative costs of domestic inputs may also occur through inflation or because of appreciation of the exchange rate as import restrictions are introduced. In practice, the distinction between inward-looking and outward looking approaches gets blurred. Most of the less developed countries have employed both strategies with different degrees of emphasis at one time or another 2. What is „Factor Endowments Theory‟? The factor endowments is a “modern” extension of the classical approach and attempts to explain the...
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...(Pre-Payment) * Down Payment * Open Account * Documentary Collections * Letters of Credit Consignment Purchase Consignment purchase terms can be the most beneficial method of payment for the importer. In this method of purchase, importer makes the payment only once the goods or imported items are sold to the end user. In case of no selling, the same item is returned to the foreign supplier. Consignment purchase is considered the most risky and time taking method of payment for the exporter. Cash-in-Advance (Pre-Payment) Cash in Advance is a pre-payment method in which, an importer the payment for the items to be imported in advance prior to the shipment of goods. The importer must trust that the supplier will ship the product on time and that the goods will be as advertised. Cash-in-Advance method of payment creates a lot of risk factors for the importers. However, this method of payment is inexpensive as it involves direct importer-exporter contact without commercial bank involvement. In international trade, Cash in Advance methods of payment is usually done when- * The Importer has not been long established. * The Importer's credit status is doubtful or unsatisfactory. * The country or political risks are very high in the importer’s country. * The product is in heavy demand and the seller does not have to accommodate an Importer's financing request in order to sell the merchandise. Down Payment In the method of down payment, an...
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...Fraud Order - 352152 This essay/coursework/dissertation was stolen from UK Essays, call 0115 966 7955 to speak to a Fraud Officer now for more details. We have made it available for use as a study resource. International Trade Law 1. The selection of an alternative dispute resolution mechanism is particularly pertinent in international trade cases because the parties are, by definition, domiciled in different nation states (Chuah, 2009). Since an agreement must therefore be reached on choice of law issues, it is common for parties to consider stepping outside standard litigation processes altogether and instead stipulating for arbitration to take place (Neipert, 2002). Arbitration offers several advantages over litigation. Typically, it is less expensive than litigation, since fewer legal professionals are required. It is also perceived to lead to a speedier resolution of disputes due to decreased formality, the removal of the need to schedule around the timetable of the formal court system, and, typically, the absence of a right of appeal (Schmitthoff, 2007). Arbitration allows the parties to control a number of variables in the dispute resolution process through prior agreement (Mustill & Boyd, 2008). These include the choice of an arbitrator with specialist knowledge of the relevant area, the scope of the arbitration, the location of arbitration and the choice of law. In addition, arbitration is a private rather than public procedure and therefore will not be subject...
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...International Trade CONTENTS INTRODUCTION 3 HISTORY 4 IMPORTANCE OF TRADE 5 INTERDEPENDENCE 6 LAW OF COMPARATIVE ADVANTAGE 7 BENEFITS OF DIVERSITY 7 COMPETITIVENESS 8 ECONOMIES OF SCALE 9 FREE TRADE 10 PROTECTIONISM 10 METHODS OF PROTECTIONISM 11 MEASURES OF TRADE 12 Global Trade Risk: 14 Types of Risk, Ways to Manage 14 CONCLUSION 17 REFERENCES 18 INTRODUCTION International trade has a big influence in our day-to-day lives, even if we do not realize it, it is a fact that almost every transaction or purchase we make, we are part of the global economy. This is because products or parts of the products have point of origin all over the world. International trade is the system by which countries exchange goods and services. Countries trade with each other to obtain products that are better quality, lower cost or just different from these goods produced at home. The goods and services that a country buys from other countries are called imports, and goods and services that are sold to other countries are called exports. While trade takes place mostly between businesses, companies and governments, individual also have a frequent participation on buying and selling goods internationally. Most international trade consists of the purchase and sale of industrial equipment, consumer goods, oil and agricultural products. In addition, services such as banking, insurance, transportation, telecommunications, engineering and tourism accounted have a big role and influence, to the point...
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...maintaining documentation for foreign trade transactions • Eexplain the key documents for a foreign trade transaction • Ddiscuss the various payment methods for international trade • Ddiscuss the characteristics of export finance and risk insurance • Ddiscuss the objectives and major tasks of current asset management • Eexplain the features of international cash management, accounts receivable management and inventory management • Ddiscuss the important differences between domestic taxation and multinational taxation. Learning resources Textbook Eiteman, Stonehill & Moffett 2013, edition 13th01, chapters 175, 17 19 and 20 and 18. Introduction This final module of the course encompasses a number of areas that are essential to any multinational finance course but have yet to be covered in this course. In particular, the module focuses on specific areas regarding the management of multinational operations. The module is essentially broken into three sections, all of which have a relevance to each other and to the other topics covered in this course. The first section focuses on the importance of foreign trade, in particular with regards to the growth potential it offers firms. More importantly, this section centres on the objectives of foreign trade, the key documentation necessary in any efficient foreign trade transaction and the objectives of such documentation and the various payment methods for foreign trade transactions, including trade finance techniques. The second...
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...The volume of trade transactions is gradually increasing in the international arena. To secure the international trade payment is particularly very crucial. There are so many factors that may affect the matter of securing payment for an international transaction. Most important among them are the potential risk and cost that the exporters and the importers are willing to face or share between them. There are four methods in international trade payment: Cash in Advance or prepayment; Open Account; Documentary Collection; and Documentary Credit. Under Cash in Advance or prepayment method payment is expected by the exporter, in full, prior to goods being shipped. This is the most secure method of payment for the exporters and consequently the least attractive for importers. On the other hand, open account is the least secure method of payment for the exporters. But it is the most attractive method for the importers. Documentary collection is more secure method for an exporter than open account trading, as the exporter’s documents are sent from the exporter’s bank to the importer’s bank. However, among all the mentioned methods, documentary credit method distributes risks in most balanced way in which both importers and exporters are almost equally protected. Letter of Credit (L/C) or the Documentary Letter of Credit is the most popular international trade payment method in Bangladesh, which covers the issues like potential risk that the parties in international trade namely the importers...
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...CO-ORDINATION AMONG ALL THE UNITS 3. ENCOURAGE SAVING 4. ACCERATE INVESTMENT 5. CAPITAL FORMATION 4. ACCERATE INVESTMENT 5. CAPITAL FORMATION 6. CREATION OF MONEY 7. FACILITATE TRADE 6. CREATION OF MONEY 7. FACILITATE TRADE Q.6. Define a Central Bank. CENTRAL BANK A banking system of a country without a central bank at the top in like a human body without a head. In the words of R.P. Kene “central bank is an institution charged with the responsibility of managing the entire monetory and banking affairs of the country in the nation’s interest.” The Central bank is generally recognized as a bank which constitutes the apex of its monetory structure, controls, directs and equalates the activities of other banks operating in the economy. A central bank has direct dealings with the governments and other banks. It is a separate branch of banking having distinct functions quite different from other banks. It operates not for profit sake. But with an objective of bring in economic prosperity to the people and ensuring economic stability in the country. Q.9(A). Define Credit Instruments. Credit Instruments are the documents describing details of credit and debit. Credit Instruments provide a written means fro future reference describing terms and conditions of any debt and loan. Credit Instruments may be an order for payment of money to a specified person or it may be a promise to pay the loan. Credit Instruments generally in use are cheques, bills of exchanges, bank overdraft etc. KINDS OF CREDIT...
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...be caused directly or indirectly by the instructions contained in or accompanying this publication. Version 2 Semester 2, 2013 Printed by: Print Central Contents Introduction 4 Study Notes 5 Element 1 – Develop and document strategies for international purchasing 7 Element 2 – Implement international purchasing strategies 10 Element 3 – Undertake more complex international purchasing 12 Element 4 – Determine payment strategies 15 Element 5 – Arrange barter and countertrade 18 Element 6 – Determine logistics strategies 20 Element 7 – Evaluate international purchasing strategies and implement identified improvements 22 Portfolio Activities Semester 2, 2013 24 Introduction Continued pressure to reduce costs and improve spending has fueled a procurement revolution. Pressures to source from emerging markets such as China, India and Eastern Europe demand improved sourcing and supply management skills. Purchasing internationally involves having to expand your knowledge of many aspects of procurement that you don't have to worry about when buying domestically. Differences in cultures, laws, communications, currencies and more. Coordinating logistics, dealing with customs, arranging payment, identifying countries for sourcing, finding suppliers, calculating landed cost, assessing risks, and implementing global contracts. These are a few of the skill set require to purchase...
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...The international trade activities are grown day by day. This trend is attributable to the increased globalization of the world economies and the availability of trade payment and finance from the international banking community. Although banks also finance domestic trade, their role in financing international trade and payment system is more critical due to the additional complications involved. First, the exporter might question the importer’s ability to make payment. Second, even if the importer is creditworthy, the government might impose exchange controls that prevent payment to the exporter. Third, the importer might not trust the exporter to ship the goods ordered. Fourth, even if the exporter does ship the goods, trade barriers or time lags in international transportation might delay arrival time. Financial managers must recognize methods that they can use to make payment and finance international trade so that they can conduct exporting or importing in a manner that maximizes the value of a business. In any international trade transaction, credit is provided by the exporter, the importer, one or more financing institutions, or any combination of these. The supplier may have sufficient cash flow to finance the entire trade cycle, beginning with the production of the product until payment is eventually made by the buyer. In some cases, the exporter may require bank financing to augment its cash flow. On the other hand, the supplier may not desire to provide financing...
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...financing Chapter 1: Background of the Study 1.1 Introduction The international trade activities are grown day by day. This trend is attributable to the increased globalization of the world economies and the availability of trade payment and finance from the international banking community. Although banks also finance domestic trade, their role in financing international trade and payment system is more critical due to the additional complications involved. First, the exporter might question the importer’s ability to make payment. Second, even if the importer is creditworthy, the government might impose exchange controls that prevent payment to the exporter. Third, the importer might not trust the exporter to ship the goods ordered. Fourth, even if the exporter does ship the goods, trade barriers or time lags in international transportation might delay arrival time. Financial managers must recognize methods that they can use to make payment and finance international trade so that they can conduct exporting or importing in a manner that maximizes the value of a business. In any international trade transaction, credit is provided by the exporter, the importer, one or more financing institutions, or any combination of these. The supplier may have sufficient cash flow to finance the entire trade cycle, beginning with the production of the product until payment is eventually made by the buyer. In some cases, the exporter may require bank financing to augment its cash flow...
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...Guide to International Trade Supporting your global ambitions Contents Foreword Section 1: Section 2: Section 3: RBS: Supporting your business Research insights Overview to trade International trade explained A guide to transportation A guide to trade documentation A guide to payment methods A guide to bonds and guarantees A guide to foreign exchange What the experts say Overcoming the barriers to foreign trade – top tips from RBS UK Trade & Investment (UKTI) – why businesses should look to export British Chambers of Commerce – finding new markets British Exporters Association Key contacts Supporting your international trade ambitions, whatever your business Index 1 3 7 13 14 19 22 28 32 34 37 39 42 45 48 51 52 55 Section 4: Section 5: Section 6: Foreword The current economic environment has certainly presented UK businesses with some challenges, but it has also offered immense opportunity as well. The appeal of overseas markets has never been greater and, for British companies looking to buy or sell outside the UK, now is undoubtedly the time to explore that opportunity. That’s why I’m delighted to share this Guide to International Trade with you. It contains a wealth of useful information about how to trade internationally, including insights into research we have conducted among UK businesses, and informative articles from prominent trade bodies such as UK Trade & Investment, the British Chambers of Commerce and the British Exporters Association. Our recent...
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...to influence the international business world include technological innovation; the shift in emphasis from manufacturing through services to the Information Age; the development of regional trading blocs; and changing demographic patterns. The main driving forces for globalisation are: reduced trade and investment barriers that enable the free flow of goods, services and capital on a global scale unprecedented technological change and progress, especially with regard to communication, information and transportation technologies competition International trade blocs multinational corporations Because of the globalisation of markets and production, over the last two decades, world trade has grown faster than world output. Foreign direct investment flows have increased substantially. Imports have penetrated more deeply into the world’s industrialised economies and competitive pressures have increased continuously in one industry after the other. These factors have collectively added to the complexity of international management and of international purchasing management. Declining barriers of trade and investment Governments have given almost universal support to increasing trade. Over the years, they have signed many international agreements on trade, and have formed a range of organisations like the General Agreement on Tariffs and Trade (GATT), the Organisation for Economic Cooperation and Development (OECD) and the World Trade...
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...countries, under different situations, rules and regulations and culture. As such, export-import transactions call for proper understanding and in depth knowledge of various technical aspects including Letters of Credit Operations. To learn these theoretical aspects and for sharing of many other practical details regarding export and imports from the experience of a professional - executive this training has been arranged. Training Objectives: This training aims at: • Why and how domestic trade and international trade differ; • The various international trade payment methods including open account payment terms; • The role of bill of lading in international trade; • Differentiate between the documents that are documents of title to goods and those that are not. • Letters of Credit –its origin, meaning & types. • Role and responsibilities of the parties involved. • Import Procedure/The process involved in a letter of credit cycle. • Documents used in international trade. • How to examine documents? • Incoterms -2010 • UCPDC-600 • ISBP-681 • Export Procedure • Financing of Export.: Pre-shipment & Post Shipment finance • Export Incentives • Dealing with Discrepancies • Options Available to the Exporter When Documents are...
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