Chapter10FinancialInstruments1.BillofExchange/draft2.PromissoryNote3.ChequeB.Modesofpayments:1.Remittance:i)T/Tii)M/Tiii)D/D2.Collection:i)D/Patsightii)D/Paftersightiii)D/A3.L/CL/catsight;L/caftersight4.others:factoring,O/A…BillofExchange/draftThreepartiesofadraft:relationshipbetweenthepartiesconcernedTypesofBE/draftTypesofBE/draftBE/draftBE/draftBE/draftL/C项下的汇票托收项下的汇票RemittanceT/T(telegraphictransfer);M/T(Mailtransfer)①applyforremittance;②Remitterpays,RemittingBKissueandsendapaymentorderbytelegraph,③notifyandpaythepayee;claimreimbursement.D/D,remittancebybanker’sdemanddraft①requesttoissueabanker’sdraft;②Remitterpays,RemittingBKissueaBanker'sdrafttoremitter③sendanadviceorcopyofthedrafttothepayingbank;④remittersendsthebanker'sdrafttopayee;⑤payeepresentsthedraftandasksforpayment;⑥PayingBKhonorthedraft,claimreimbursement.CollectionOperations1)D/Patsight;D/PaftersightD/Patsight①SellereffectsShipment;②SellermakesoutDOCS;entrustRemittingBKtocollectpayment;③SellersendscollectionorderandDOCStoRemittingBK;④CollectingBKpresentsdocumentsaccordingtothecollectionorder;⑤BuyerpaystogetholdoftheDOCS;⑥CollectingBanksurrenderstheDOCS;⑦CollectingBankadvises&transferstheproceeds;⑧RemittingBanktransferstheproceedstoseller.AdvantageanddisadvantageofcollectionInthecaseofpaymentbyD/A,thefurtherdifficultyarisesthat,onthebuyeracceptingthedraft,thedocumentsoftitlewillbesurrenderedtohim.Hence,ifthebuyergoesbankruptorbecomesinsolventbeforethepaymentofthedraft,thelosswillfallontheseller.Therefore,seldomdoesaselleracceptpaymentbyD/PorD/A,unlessthebuyerisofunquestionableintegrityorifthereisaspecialrelationbetweenthesellerandthebuyer.ItisfarbetterfortheexportertouseL/CratherthanD/PorD/A.However,undercertaincircumstancesorforcertainpurposes,paymentbyD/PorD/Aisstilldeemednecessary,forinstance:*Topromotetradewithdevelopingcountries.*Topushthesaleofournewproductsanddifficult-sellcommodities.*Forpromotionoftradewiththesmallenterprisesbygrantingcred