国际经济法精品教学（华南师范大学）financing.ppt

1、Financing,A.FINANCING FOREIGN TRADE（对外贸易融资） B.BILLS OF LADING（提单） C.BILLS OF EXCHANGE（汇票） D.PROMISSORY NOTES（本票） E.NEGOTIABILITY OF BILLS AND NOTES（票据的流通性） F.THE NEGOTIATION AND TRANSFER OF BILLS AND NOTES（票据的流转） G.LETTERS OF CREDIT（信用证） H.FINANCING FOREIGN OPERATIONS（对外经营融资）,The Financing of Foreig

2、n Trade: Involves the underwriting, paying and collecting of money for the purchase of goods and services. Trade Documents: are used to facilitate the financing of foreign trade. Bills of Lading: documents of title that represent the goods being traded (discussed in Lecture 10). Bills of Exchange an

3、d Promissory Notes: documents used for transferring money from the buyer to the seller. Letters of Credit: documents used to guarantee the sellers delivery of goods and the buyers delivery of money.,A.FINANCING FOREIGN TRADE,B.BILLS OF LADING,1.The Essential Document for all international sales A do

4、cument of title: It represents the goods. Allows for transfer of title while goods are in the possession of a carrier or warehouseman.,C. BILLS OF EXCHANGE,1.Defined: A bill of exchange (or draft) is A written, dated and signed instrument. Containing an unconditional order. From drawer. Directing dr

5、awee. To pay a payee. A definite sum of money. With payment to be made. On demand, or At a specified future date.,2. Bills of Exchange are Negotiable Instruments “Negotiable” means: the drawer cannot refuse to pay a proper holder because The underlying contract was improperly performed, or The instr

6、ument was improperly entered into. Importance: Bills of exchange are more readily salable and, therefore, useful financial tools.,3. The Laws Governing Bills of Exchange a. Anglo-American laws: English Bills of Exchange Act (BEA) of 1882. Applicable in UK and commonwealth countries. United States Un

7、iform Commercial Code (UCC). Adopted in all US states except Louisiana. b. Model laws applicable in the rest of the world: Uniform Law on Bills of Exchange and Promissory Notes (ULB) of 1930. Uniform Law for Checks (ULC) adopted in 1931.,4. The “Form” of Bills of Exchange a. BEA and UCC requirements

8、: In writing. Payable either to order or to bearer. b. ULB requirements: 1)In writing. 2) Payable either to order or to bearer. 3) Contain the term bill of exchange (or an equivalent term) in The body, and The language of the check. 4) State the place where the bill is drawn. 5) State the place wher

9、e payment is to be made. 6) Be dated,5. Types of Bills of Exchange a. Time bill: Drawee must pay at a definite future time. b. Sight (or demand) bill: Drawee must pay either when a)The holder presents the bill for payment, or b)Within a stated time-period after presentment. C.Trade acceptances: Draw

10、ee is one who bought goods from the drawer and owes the sale price to the drawer. a)Drawee is a credit buyer. b)Drawer is also the payee. c)May be a time or sight bill. d.Checks: Drawee is holding money on account for drawer. a) Drawee is a bank. b) Checks are always payable on demand.,D.PROMISSORY

11、NOTES,1. Defined: A promissory note (or simply a “note”) is A written promise. To pay a determinate sum of money. Made between two parties. Maker: The issuer of a promissory note. Payee: The person to whom the note is to be paid.,2. Difference Between a Promissory Note and a Bill of Exchange: The ma

12、ker of a note promises to personally pay the payee rather than ordering a third party to do so 3. Governing Law: Same as those that apply to bills of exchange,E.NEGOTIABILITY OF BILLS AND NOTES,1.Requirements of Negotiability a. Be in the proper form, and b. Contain the following promissory elements

13、: a)State an unconditional promise or order to pay. b)State a definite sum of money or a monetary unit of account. Money: “a medium of exchange authorized or adopted by a domestic or foreign government as part of its currency.” Monetary Unit of Account: “a medium of exchange established by an interg

14、overnmental organization or by an agreement between two or more nations.” Definite Sum: the sum to be paid must be ascertainable from the bill or note itself without reference to any outside source.,c) Be payable on demand or at a definite time. d) Be signed by the maker or drawer. Signature: “Any s

15、ymbol executed or adopted by a party with present intention to authenticate a writing.”,F.THE NEGOTIATION AND TRANSFER OF BILLS AND NOTES,1.Assignment: The transfer of rights under a contract a.The assignee acquires only those rights that the assignor possessed. b.Any objections to honoring the assi

16、gned obligations that could be raised against the assignor can be raised against the assignee.,2.Negotiation: The transfer of a bill or note in such a way that the recipient becomes a holder a.Negotiating order paper. 1)Order paper: A bill or note payable to a named payee. 2)Negotiated by delivery a

17、nd endorsement. b.Negotiating bearer paper. 1)Bearer paper: A bill or note payable to the bearer or to cash. 2)Negotiated by delivery. c.Converting order to bearer paper and bearer to order paper. 1)Order to bearer paper: a)By an endorsement in blank, i.e., the endorsees signature alone. b)By an end

18、orsement to pay to the bearer. 2)Bearer to order paper: By the use of a special endorsement, e.g. “pay to John Adams.”,3.Forged Endorsements a.Effect. 1)ULB: A forged endorsement is effective. a)Both the person taking a forged instrument and all subsequent holders are entitled to payment. b)Rational

19、e: This rule encourages the free transfer and exchange of bills and notes. 2)BEA and UCC: A forged endorsement is ineffective. a)The endorsee taking from a forger is responsible for determining the validity of an endorsement.,1.Alternatives to Using Letters of Credit a. “Cash in advance” term: Used

20、if seller is unable to determine buyers creditworthiness. b. “Documents Against Payment” term: Used when buyer wants to confirm that the goods have been shipped. 1) Seller instructs a bank in the buyers country to release title (e.g., a carriers bill of lading) only after the buyer delivers to the b

21、ank a receipt from the seller indicating that the seller has received payment. c. “Documents Against Acceptance” term: Buyer insists upon taking delivery before making payment. 1)Seller instructs a bank in the buyers country to release title only on receipt of an acknowledgement of delivery.,G.LETTE

22、RS OF CREDIT,2.The Letter of Credit Transaction a.Defined: An instrument 1)Issued by a bank, or other person, at the request of a customer (called an “account party”). 2)It is a conditional agreement between the issuer and the account party that is intended to benefit a third party. 3)It obliges the

23、 issuer: a)To pay a bill of exchange drawn by the account party, up to a certain sum of money, b)Within a stated time period, and c)Upon presentation by the beneficiary of documents designated by the account party.,b.Function: To substitute the credit of a recognized international bank for that of t

24、he buyer. c.The parties: 1)The buyer is the account party. 2)The buyers bank is the issuing bank. 3)The seller is the beneficiary. d.Types of Letters of Credit: 1)Irrevocable: Cannot be altered without the beneficiarys express consent. a)Preferred by beneficiaries because it provides the most securi

25、ty. 2)Revocable: Revocable by the issuing bank. a)Disliked by beneficiaries because it provides the least security. 3)Confirmed: A second bank adds its endorsement to the credit, indicating that it too will make payment against the specified documents. a)Gives the beneficiary additional assurance th

26、at payment will be made.,3.Governing Law: a.International Chamber of Commerces Uniform Customs and Practices for Documentary Credits (UCP) governs virtually all international letter of credit transactions. 1)Most banks incorporate the UCP in the terms of the credits they issue.,4.Applying for a Lett

27、er of Credit a.Applicant must have an existing relationship with a bank. b.Applicant completes a “Letter of Credit Application.” 1)Caveat: Not an application for credit, but a set of instructions telling the issuing bank what needs to be included in the letter of credit. c.The consequences of not ob

28、taining a letter of credit when the buyer has contractually agreed to obtain one 1)If the credit was a condition precedent to the formation of the contract: There will be no contract, and consequently no breach. 2)If the credit was a condition for the performance of the contract: Because the contrac

29、t already exists, the failure to obtain a credit will be a breach that will entitle the injured party to sue for damages.,5.Documentary Formalities a.No particular form is required. b.Must have the following formalities: 1)Be in writing. 2)Be signed by the issuer. 3)Be complete and precise. 4)Indica

30、te if it is irrevocable. a)Presumption that a credit is revocable. 1Note: The latest version of the UCP (UCP 600) changes this rule so that a credit is presumed to be irrevocable. 5)Indicate clearly when and how credits are to be paid. a)This may be by: 1Sight payment. 2Deferred payment. 3Acceptance

31、. 4Negotiation. 6)Name the bank(s) which is/are authorized to: a)Pay the credit, b)Accept bills of exchange drawn in accordance with the letter, or c)Negotiate the credit.,6.Advising and Confirming Letters of Credit a.Advising Bank: A corresponding bank in the beneficiarys county which delivers the

32、credit to the beneficiary. 1)Assumes no liability for paying the letter of credit. 2)Only obligation is to the issuing bank, to insure that the beneficiary is advised and the credit delivered, and to take “reasonable care to check the apparent authenticity of the credit.” a)It does this by comparing

33、 the signature on the credit with the authorized signatures it maintains on file.,b.Confirming Bank: A bank that independently promises that it will pay, accept, or negotiate a credit, as appropriate, when the documents specified in the credit are presented to it and the other terms and conditions o

34、f the credit have been complied with. 1)A confirming bank is entitled to reimbursement from the issuing bank if the documents it receives are in order. 2)Obligations of confirming banks: a)If the documents are not in order the confirming bank will be left with title to the goods in its own name. b)I

35、f the issuing bank or the account party are unable to reimburse the confirming bank, the confirming bank will be left with title to the goods in its own name.,7.The Obligations of Banks a.To examine documents with reasonable care. b.Paying, accepting, or negotiating banks must forward irregular docu

36、ments to the issuing bank. c.To honor or refuse credits “on the basis of the documents alone.” 1)So long as the documents appear regular on their face, the bank must pay. a)The Rule of Strict Compliance: A bank may reject documents that do not exactly comply with the terms specified in the letter of

37、 credit.,2)Fraud by the Seller. a)If the seller delivered mislabeled goods to a carrier to obtain the documents it needed to collect against a letter of credit, the issuing bank may nevertheless pay the seller even if it knows of this. c)If the underlying transaction was fraudulent and the credit is

38、 revocable, the issuing bank may refuse to pay the seller. d)If the underlying transaction was fraudulent and the credit is irrevocable, the issuing bank probably has to pay the seller. 1There is no firm rule in the UCP.,3)Fraud in the Collection Process. a)If a collecting bank, knowing that a lette

39、r of credit has been altered, attempts to collect from the issuing bank, the issuing bank does not have to pay.,8.Rights and Responsibilities of Beneficiaries a.Basis of rights and responsibilities: Commercial practice. 1)There are no contractual rights. b.Prerequisites for collecting on a letter of credit: 1)The beneficiary must comply with the terms and conditions of the credit. 2)The beneficiary must present to the issuer (or the issuers agent) the documents designated in the credit. a)Commonly these include 1A certificate of