III. Using the vocabulary give the main points of the article.

TEXT D. RISKS IN LC SITUATIONS

I. Read the article and give the summary of it.

Fraud Risks

The payment will be obtained for nonexistent or worthless merchandise against presentation by the beneficiary of forged or falsified documents. Credit itself may be forged.

Sovereign and Regulatory Risks

Performance of the Documentary Credit may be prevented by government action outside the control of the parties.

Legal Risks

Possibility that performance of a Documentary Credit may be disturbed by legal action relating directly to the parties and their rights and obligations under the Documentary Credit

Force Majeure and Frustration of Contract

Performance of a contract – including an obligation under a Documentary Credit relationship – is prevented by external factors such as natural disasters or armed conflicts

Risks to the Applicant

Non-delivery of Goods

Short Shipment

Inferior Quality

Early /Late Shipment

Damaged in transit

Foreign exchange

Failure of Bank viz Issuing bank / Collecting Bank

Risks to the Issuing Bank

Insolvency of the Applicant

Fraud Risk, Sovereign and Regulatory Risk and Legal Risks

Risks to the Reimbursing Bank

no obligation to reimburse the Claiming Bank unless it has issued a reimbursement undertaking.

Risks to the Beneficiary

Failure to Comply with Credit Conditions

Failure of, or Delays in Payment from, the Issuing Bank

Credit Issued by Party other than Bank

II. So what are the major risks in LC payment? Find additional information on each type of risk and present it to the group mates.

III. Act out a dialogue between the buyer - the seller – the customs consultant. The seller (from Africa) is not well-known to the buyer (from Belarus). But the buyer is extremely interested in the product for sale – rare species of snakes for the private zoo. Discuss the terms and methods of payment and try to eliminate all possible risks. Use the vocabulary and the information from the texts.

TEXT E. INVOICE

I. Read the article and give synonyms for the underlined words. Use the dictionary of synonyms or/and the dictionary of economic terms.

An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities, and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must pay the seller, according to the payment terms. The buyer has a maximum amount of days to pay these goods and are sometimes offered a discount if paid before.

From the point of view of a seller, an invoice is a sales invoice. From the point of view of a buyer, an invoice is a purchase invoice. The document indicates the buyer and seller, but the term invoice indicates money is owed or owing. In English, the context of the term invoice is usually used to clarify its meaning, such as "We sent them an invoice" (they owe us money) or "We received an invoice from them" (we owe them money).

A typical invoice contains:

The word invoice or Tax Invoice if in Australia.

A unique reference number (in case of correspondence about the invoice)

Date of the invoice

Tax payments if relevant (e.g. GST and Vat Tax)

Name and contact details of the seller

Tax or company registration details of seller (if relevant) [e.g. Australia Business Number (ABN) for Australian businesses.]

Name and contact details of the buyer

Date that the product was sent or delivered

Purchase order number (or similar tracking numbers requested by the buyer to be mentioned on the invoice)

Description of the product(s)

Unit price(s) of the product(s) (if relevant)

Total amount charged (optionally with breakdown of taxes, if relevant)

Payment terms (including method of payment, date of payment, and details about charges late payment)

There are different types of invoices:

Pro forma invoice - In foreign trade, a pro forma invoice is a document that states a commitment from the seller to provide specified goods to the buyer at specific prices. It is often used to declare value for customs. It is not a true invoice, because the seller does not record a pro forma invoice as an accounts receivable and the buyer does not record a pro forma invoice as an accounts payable. A pro forma invoice is not issued by the seller until the seller and buyer have agreed to the terms of the order. In few cases, pro forma invoice is issued for obtaining advance payments from buyer, either for start of production or for security of the goods produced.

Credit memo - If the buyer returns the product, the seller usually issues a credit memo for the same or lower amount than the invoice, and then refunds the money to the buyer, or the buyer can apply that credit memo to another invoice.

Commercial invoice - a customs declaration form used in international trade that describes the parties involved in the shipping transaction, the goods being transported, and the value of the goods. It is the primary document used by customs, and must meet specific customs requirements, such as the Harmonized System number and the country of manufacture. It is used to calculate tariffs.

Debit memo - When a company fails to pay or short-pays an invoice, it is common practice to issue a debit memo for the balance and any late fees owed. In function debit memos are identical to invoices.

Self-billing invoice - A self billing invoice is when the buyer issues the invoice to himself (e.g. according to the consumption levels he is taking out of a vendor-managed inventory stock).

Timesheet - Invoices for hourly services such as by lawyers and consultants often pull data from a timesheet. A Timesheet invoice may also be generated by Operated equipment rental companies where the invoice will be a combination of timesheet based charges and equipment rental charges.

Invoicing - The term invoicing is also used to refer to the act of delivering baggage to a flight company in an airport before taking a flight.

Statement - A periodic customer statement includes opening balance, invoices, payments, credit memos, debit memos, and ending balance for the customer's account during a specified period. A monthly statement can be used as a summary invoice to request a single payment for accrued monthly charges.

Progress billing used to obtain partial payment on extended contracts, particularly in the construction industry.

Collective Invoicing is also known as monthly invoicing in Japan. Japanese businesses tend to have many orders with small amounts because of the outsourcing system (Keiretsu), or of demands for less inventory control (Kanban). To save the administration work, invoicing is normally processed on monthly basis.

Some invoices are no longer paper-based, but rather transmitted electronically over the Internet. It is still common for electronic remittance or invoicing to be printed in order to maintain paper records. Standards for electronic invoicing varies widely from country to country. Electronic Data Interchange (EDI) standards such as the United Nation's EDIFACT standard include message encoding guidelines for electronic invoices.

The United Nations standard for electronic invoices ("INVOIC") includes standard codes for transmitting header information (common to the entire invoice) and codes for transmitting details for each of the line items (products or services). The "INVOIC" standard can also be used to transmit credit and debit memos. The "IFTMCS" standard is used to transmit freight invoices.

II. Translate the word combinations. Choose 3 expressions that you like most of all and give their definitions to the group. The group will guess the combinations you are explaining.

1) to declare value for customs, 2) a commercial document, 3) an accounts receivable, 4) refunds the money, 5) to short-pay, 6) late fees, 7) inventory stock, 8) pull data, 9) to be transmitted electronically, 10) to maintain paper records, 11) a single payment.

Date: 2016-01-14; view: 847