EXP Form means Export Form which is used to export any commodity to abroad. It is a prescribed form by Bangladesh Bank in Appendix 5/19 of Guidelines For Foreign Exchange Transations.
Branch (AD) will certify EXP Form only after confirming the following:
i. Arrangements have been made for realization of Export proceeds.
ii. Bonafide importer/consignee abroad
iii. EXP has been signed by the Exporter
iv. Arrangement has been made for receipt by Authorized Dealer of documents of title to goods.
Contents of EXP:
EXP No., Exporters registration no., goods details, shipment details, signature of exporter, certification of AD etc.
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Showing posts with label Fex. Show all posts
LCAF-Letter of Credit Authorization Form
LCAF stands for Letter of Credit Authorization Form. It is mainly application for permission for opening LC as well as importing of goods into Bangladesh and remittance there against. So it is used for opening LC, releasing goods and remittance there against.
Bank should ensure while issuing LCAF:
Valid Import Registration Certificate (IRC)
Renewal of IRC
Item to be imported is eligible as per IPO (Import Policy Order)
Purpose of LCAF:
Allowing imports, releasing goods and remittance there against.
There are five copies in each set of LCAF., The use of each copy are:
Original-For Exchange monitoring purpose: For opening LC and for effecting remittances
Duplicate-Custom purpose: For releasing goods
Triplicate and Quardruplicate- For controlling agency (will be send to the CCI&E along with LC copy)
Quintuplicate - Office copy
Bank should ensure while issuing LCAF:
Valid Import Registration Certificate (IRC)
Renewal of IRC
Item to be imported is eligible as per IPO (Import Policy Order)
Purpose of LCAF:
Allowing imports, releasing goods and remittance there against.
There are five copies in each set of LCAF., The use of each copy are:
Original-For Exchange monitoring purpose: For opening LC and for effecting remittances
Duplicate-Custom purpose: For releasing goods
Triplicate and Quardruplicate- For controlling agency (will be send to the CCI&E along with LC copy)
Quintuplicate - Office copy
ISBP 2007
ISBP stand for International Standard Banking Practice for the Examination of Documents under Documentary Letter of Credit. It is an ICC publication and official ICC document. ISBP was prepared in order to fill the gap between general principals of UCP and the daily practice.
Negotiation
As per UCP-600
Negotiation means
the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.
Negotiation means
the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.
Honour
As per UCP-600
Honour means:
a. to pay at sight if the credit is available by sight payment.
b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment.
c. to accept a bill of exchange ('draft') drawn by the beneficiary and pay at maturity if the credit is available by acceptance.
Honour means:
a. to pay at sight if the credit is available by sight payment.
b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment.
c. to accept a bill of exchange ('draft') drawn by the beneficiary and pay at maturity if the credit is available by acceptance.
Complying Presentation
As per UCP-600
Complying Presentation means a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of these rules (UCP-600) and international standard banking practice (ISBP).
Complying Presentation means a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of these rules (UCP-600) and international standard banking practice (ISBP).
Credit as per UCP-600
Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation.
Pre Shipment Finance and Post Shipment Finance
PRE-SHIPMENT FINANCE:
Pre-shipment finance as the name suggest, given to finance the activities on an exporter prior to the actual shipment of goods for export. The purpose of such finance is to meet working capital needs starting from the point of purchasing raw materials to transportation of goods for export to foreign country.
UCP-600 summary
UCP stands for Uniform Customs and Practice for Documentary Credit
There are 39 articles
Article 1: Application of UCP
Article 2: Definitions of Advising bank, Application, Banking day, Beneficiary, Complying presentation, Confirmation , Confirming bank, Credit, Honour, Issuing bank, Negotiation, Nominated Bank, Presentation, Presenter.
There are 39 articles
Article 1: Application of UCP
Article 2: Definitions of Advising bank, Application, Banking day, Beneficiary, Complying presentation, Confirmation , Confirming bank, Credit, Honour, Issuing bank, Negotiation, Nominated Bank, Presentation, Presenter.
Barriers to International Trade
There are basically three barriers to International trade that are used by countries, and they are as follows:
Responsibilities and Liabilities of Beneficiary/Exporter
Responsibilities and Liabilities of Beneficiary(exporter):
i) The beneficiary has the obligation to make export as per the contract and produce the documents as required by the credit. He 'can in no case avail itself of the contractual relationships existing between banks or between the applicant and the issuing bank'.
ii) In a transferable credit, if he requires it to be transferred, he should pay the charges of the transferring bank.
Different parties of Letter of Credit
i) The beneficiary has the obligation to make export as per the contract and produce the documents as required by the credit. He 'can in no case avail itself of the contractual relationships existing between banks or between the applicant and the issuing bank'.
ii) In a transferable credit, if he requires it to be transferred, he should pay the charges of the transferring bank.
Different parties of Letter of Credit
Responsibilities and Liabilities of Applicant/Importer
The responsibilities and obligations of the Applicant(Importer):
i) Since the credit is based on the sale contract with the exporter i.e. the importer has a duty to the exporter to ensure that the credit is opened as per the terms of the sale contract. However, once a credit is issued, it stands by itself whether or not it is in accordance with the sale contract.
ii) Even if the bank that opens a letter of credit fails the importer remains liable to the exporter for the amount if the exporter has fulfilled his obligation under the contract.
iii) The obligations between the importer and the issuing bank are governed by the application-cum-agreement submitted by the importer to the bank.
iv) The applicant is liable to indemnify the banks against all obligations and responsibilities impossed by foreign laws and usages.
Parties involved in Letter of Credit
Different kinds of Bill of Lading
1. Clean B/L: A bill of lading which acknowledges the receipt of the goods on board the carrying vessel in apparent good order and condition and does not indicate any defective condition of the goods or packages is called a clean bill of lading.
2. Claused B/L: A bill of lading which expressly declares a defective condition of the goods and/or packages is called a claused bill of lading.
2. Claused B/L: A bill of lading which expressly declares a defective condition of the goods and/or packages is called a claused bill of lading.
INCOTERMS
INCOTERMS means International Commercial Terms, Trade terms, Delivery terms. These terms have been prepared and named by the ICC Paris. First published in 1936 and latest in 2000. At present there are 13 INCOTERMS.
Exchange Position
Exchange Position: Exchange position means difference between total sale and total purchase of a particular Foreign Currency in a particular period. The book in which the exchange position is recorded is called position book.
Open positon: If exchange positon is too much bought or over sold then it is called open position. The ADs are required to work out their open exchange positon daily and report to the Central Bank the positions (over bought/over sold) as at the close of the business on Thursday at each week. The ADs will purchage and sell foreign currencies and will ensure that the prescribed open position limit is not exceeded.
Over Bought or Long Position: If total purchase of Foreign Currency is more than total sales then it is called over bought or long position.
Over Sold or Short Position: If total sales are more than total purchases then it is called over sold or short position.
Square up Exchange Position: If total purchase become equal to tatal sales or difference between total purchase & total sales are negligible then it is called square up exchange position.
The Ads should always be careful to maintain its exchange position within the prescribed limit and always take care of exchange rate fluctuation.
Open positon: If exchange positon is too much bought or over sold then it is called open position. The ADs are required to work out their open exchange positon daily and report to the Central Bank the positions (over bought/over sold) as at the close of the business on Thursday at each week. The ADs will purchage and sell foreign currencies and will ensure that the prescribed open position limit is not exceeded.
Over Bought or Long Position: If total purchase of Foreign Currency is more than total sales then it is called over bought or long position.
Over Sold or Short Position: If total sales are more than total purchases then it is called over sold or short position.
Square up Exchange Position: If total purchase become equal to tatal sales or difference between total purchase & total sales are negligible then it is called square up exchange position.
The Ads should always be careful to maintain its exchange position within the prescribed limit and always take care of exchange rate fluctuation.
Methods of settling debts in Counter Trade
1. Barter
2. Switch trading
3. Counter purchase
4. Buyback
5. Offset
2. Switch trading
3. Counter purchase
4. Buyback
5. Offset
Methods of settling debts in International Trade
a. Advance Payment
b. Open Account
c. Consignment Sale
d. Bill for Collection
b. Open Account
c. Consignment Sale
d. Bill for Collection
Means and Methods for settlement of International Payment
There are some means and methods for settlement of international payment:
i. Foreign accounts of Banks:
a. Nostro Accounts
b. Vostro Accounts
c. Loro Accounts
ii) Credit Instruments:
a. Telegraphic Transfer (TT)
b. Mail Transfer (MT)
c. Banker's Draft
d. Bills of exchange
e. Letter of Credit
f. Stock Draft
g. Personal Cheques/Dividend Warrants etc.
h. SWIFT-The Society for World-wide International Financial Telecommunications
iii) Other means of International payment:
a. Currency notes and coins
b. Bullion/Gold
c. International Money Order
iv) Travel Transaction:
a. Traveler's Cheque
b. Credit Cards
c. Eurocheques
d. Foreign Currency Accounts
i. Foreign accounts of Banks:
a. Nostro Accounts
b. Vostro Accounts
c. Loro Accounts
ii) Credit Instruments:
a. Telegraphic Transfer (TT)
b. Mail Transfer (MT)
c. Banker's Draft
d. Bills of exchange
e. Letter of Credit
f. Stock Draft
g. Personal Cheques/Dividend Warrants etc.
h. SWIFT-The Society for World-wide International Financial Telecommunications
iii) Other means of International payment:
a. Currency notes and coins
b. Bullion/Gold
c. International Money Order
iv) Travel Transaction:
a. Traveler's Cheque
b. Credit Cards
c. Eurocheques
d. Foreign Currency Accounts
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