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jodyqig
m@
16
3.
天津
财经
大学
齐俊
妍唐
丽co
m
LEARNING POINTS:
The definition of international trade and international trade practice
The importance of international trade to the world economy and to China
The barriers to international trade International trade customs
jodyqig
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16
3.
天津
财经
大学
齐俊
妍唐
丽co
m
WHAT IS INTERNATIONAL TRADE?
Exchange of goods and services across international boundaries or territories.
Export Import Visible trade Invisible trade
jodyqig
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16
3.
天津
财经
大学
齐俊
妍唐
丽co
m THE IMPORTANCE OF INTERNATIONAL TRADE
Important role of the world economy
Export percentage has risen significantly over the last 10 years
jodyqig
m@
16
3.
天津
财经
大学
齐俊
妍唐
丽co
m
INTERNATIONAL PRACTICE AND LAWS APPLICABLE TO INTERNATIONAL TRADE
Domestic lawsDomestic laws
International trade customsInternational trade customs
INCOTERMS INCOTERMS
UCP UCP
CISG CISG
jodyqig
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16
3.
天津
财经
大学
齐俊
妍唐
丽co
mPROBLEMS CONCERNING INTERNATIONAL TRADE
Trade BarriersTrade Barriers
Risks in International TradeRisks in International Trade
jodyqig
m@
16
3.
天津
财经
大学
齐俊
妍唐
丽co
m
QUESTIONS FOR DISCUSSING What is international trade ? Why we need international trade? What are the risks in international trade? What are the barriers to international trade? What is the real function of tariffs? Do you have a
ny idea of particular tariffs that our custom charges for some specific commodities that come into our country?
jodyqig
m@
16
3.co
m天
津财
经大
学齐
俊妍
唐丽
CHAPTER TWO SALES AND PURCHASE CONTRACT OF INTERNATIONAL COMMODITIES
jodyqig
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16
3.
天津
财经
大学
齐俊
妍唐
丽co
m
LEARNING POINTS
Definition of contact and the functions of a written letter
Essential features of a legally binding contract
Basic content of the international sales and purchase contract
jodyqig
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16
3.
天津
财经
大学
齐俊
妍唐
丽co
m
WHAT IS A CONTRACT?
An agreement enforceable by law, by which two parties mutually promise to buy or sell some particular thing, or to do a certain work.
An agreement enforceable by law, by which two parties mutually promise to buy or sell some particular thing, or to do a certain work.
An agreement which sets binding obligations of the relevant parties.An agreement which sets binding obligations of the relevant parties.
jodyqig
m@
16
3.
天津
财经
大学
齐俊
妍唐
丽co
mTHE FUNCTIONS OF A WRITTEN CONTACT
The evidence of a contractThe evidence of a contract
The condition of effectivenessThe condition of effectiveness
The guidance of performanceThe guidance of performance
jodyqig
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16
3.
天津
财经
大学
齐俊
妍唐
丽co
mTHE ESSENTIAL FEATURES OF A LEGALLY BINDING CONTRACT
Legal capacity to contract of the parties
Consideration
Legal contract content
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m
QUESTIONS FOR DISCUSSION
List the major means involved in the sales contract of international commodity.
When drawing up a contract, what must be borne in mind?
What must be contained in the sales contract of international commodity?
Is an oral contract normally equally as binding as a written one? why?
jodyqig
m@
16
3.
天津
财经
大学
齐俊
妍唐
丽co
m
LEARNING POINTS
Importance of the name and quality of commodity
Category of the quality stipulation method
Main concerns in stipulating the quality clause in the contract
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m
NAME OF COMMODITY
The name of commodity must be specific and concrete.
The name contracted must be that of the goods which the seller is able to supply and also should be the goods the buyer is in need of.
International standardized names are advisable.
Choose proper name for the commodities.
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m
QUALITY OF COMMODITY
Intrinsic quality Intrinsic quality includes the physical or mechanical performance, chemical composition and the biological features of the goods.
Outside form Outside form includes the shape, color, style of the goods.
Quality of commodity refers to the intrinsic quality and the outside form or shape of the goods. Quality of commodity refers to the intrinsic quality and the outside form or shape of the goods.
jodyqig
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天津
财经
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齐俊
妍唐
丽co
m
SALE BY ACTUAL QUALITY
sale as seensale as seen
Sale by DescriptionSale by Description
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m QUALITY CLAUSE IN SALES CONTRACT
Things need to pay attention:
The stipulation should be concise and clear
Tolerance clause
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m
QUESTIONS FOR DISCUSSION
When regulating the term of name of goods, what should be taken attention to?
What kind of goods is usually purchased by actual quality?
How to express the quality of goods? What is “counter sample”? What kinds of products are possible to have
unavoidable deviations?
jodyqig
m@
16
3.
天津
财经
大学
齐俊
妍唐
丽co
m
LEARNING POINTS
Units of measurement commonly used in international trade
Conversion of units in different measurement systems
How to measure weight in international trade How to stipulate the quantity clause in the
contract and what is the more or less clause
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m
MEASUREMENT SYSTEM
The metric system The British system The US system The international system of units.
China adopts the international system of units. China adopts the international system of units.
jodyqig
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天津
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齐俊
妍唐
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m
CALCULATION OF WEIGHT
By gross weight By net weight By conditioned weight By theoretical weight: By legal weight and net net weight
jodyqig
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齐俊
妍唐
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mQUANTITY CLAUSE IN SALES CONTRACT
For example:For example:““5000m/t, with 5% more or less at seller’s option”.
More or less clause:More or less clause:Overload and underload are permitted but should not surpass a certain percentage of the stipulated quantity, i.e. both the seller and the buyer agree to allow some more or less of the goods that not exceed the fixed quantity agreed upon delivered.
More or less clause:More or less clause:Overload and underload are permitted but should not surpass a certain percentage of the stipulated quantity, i.e. both the seller and the buyer agree to allow some more or less of the goods that not exceed the fixed quantity agreed upon delivered.
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m
QUESTIONS FOR DISCUSSION
How many measurement systems are commonly used in international trade? What are they?
Please state the methods of measuring weight in international trade.
What does the more or less clause include, how to stipulate it in the contract? Please explain by giving an example.
jodyqig
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16
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天津
财经
大学
齐俊
妍唐
丽co
m
LEARNING POINTS
Types of packing used in international trade Types and methods of transport packing Marks in transport packing How to stipulate the packing clause in the
contract
jodyqig
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妍唐
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m
TRANSPORT PACKING Also called big or outer packing or shipping packing. To protect goods, and make the goods easy to store
and ship.
Be solid and durable, adaptable to the changing climates at the loading and unloading ports and transit areas;
Be uniform so as to storage convenience, stowing, calculation, cargo inspection and identification;
Have the least weight, volume, and cost decrease. In compliance with customs or statutory
requirements.
Requirements:Requirements:
jodyqig
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3.
天津
财经
大学
齐俊
妍唐
丽co
mTHE METHODS OF TRANSPORT PACKING
Flexible containersFlexible containers
Unionization (or combined) packing Unionization (or combined) packing
Single piece packingSingle piece packing
PalletsPallets ContainersContainers
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m
MARKS ON TRANSPORT PACKING
to identify goods to understand the place of origin to simplify the examination of documents to keep the secret of business to protect the cargoes
Functions:Functions:
jodyqig
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财经
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妍唐
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m
MARKS ON TRANSPORT PACKING
Dimension Mark, Weight Mark, and Mark of the Place of OriginDimension Mark, Weight Mark, and Mark of the Place of Origin
Warning Marks Warning Marks
Indicative MarksIndicative Marks
Shipping marksShipping marks
jodyqig
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妍唐
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m
SELLING PACKING
Small or inner or immediate packing
To protect the commodities and has the function of making the commodities nicer as well.
jodyqig
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妍唐
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m
NEUTRAL PACKING
A special type of packing, which makes no mention of the country of origin.
neutral packing with designated brand neutral packing with designated brand
neutral packing without designated brandneutral packing without designated brand
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
mPACKING CLAUSE IN SALES CONTRACT
Include:Packing materialPacking modeSpecificationsMarksNumber or weight of packingWho bears the charges, etc.Example: Example: In wooden cases of 50 kilos net each; in cartons or crates of about 12 kg net, each fruit wrapped with paper.
jodyqig
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天津
财经
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齐俊
妍唐
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m
QUESTIONS FOR DISCUSSION
What is the function of packing? Describe the classification of packing briefly. How many packing mark are there? What are
the main points in the shipping mark? What are the contents of packing term in the
contract? Describe the nature and functions of neutral
packing and why we use it sometimes. Why most of the international trade goods
are packed goods?
jodyqig
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16
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天津
财经
大学
齐俊
妍唐
丽co
m
LEARNING POINTS
The definition of trade terms What is INCOTERMS 2000 Responsibilities of relevant parties under
each trade term The six most commonly used trade terms
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m
TRADE TERMS
Example: FOB Shanghai.
Short terms and abbreviations which are used to explain the price composition, to define the delivery of the goods, to indicate which party bear the freight, insurance and other relevant charges, and assume the liability in case damage or loss the goods occurs.
jodyqig
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天津
财经
大学
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妍唐
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m
TERMS IN INCOTERMS 2000
Group EDeparture
EXW Ex Works (... named place)
Group FMain carriage
unpaid
FCA Free Carrier (... named place)FAS Free Alongside Ship (... named port of shipment)FOB Free On Board (... named port of shipment)
Group CMain Carriage
Paid
CFR Cost and Freight (... named port of destination) CIF Cost, Insurance and Freight (... named port of destination)CPT Carriage Paid To (... named place of destination)CIP Carriage and Insurance Paid To (... named place of destination)
Group DArrival
DAF Delivered At Frontier (... named place)DES Delivered Ex Ship (... named port of destination)DEQ Delivered Ex Quay (... named place of destination)DDU Delivered Duty Unpaid (... named port of destination)DDP Delivered Duty Paid (... named place of destination)
jodyqig
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16
3.
天津
财经
大学
齐俊
妍唐
丽co
mOBLIGATIONS OF THE BUYER AND THE SELLER
A THE SELLER'S OBLIGATIONS B THE BUYER'S OBLIGATIONS
A1 Provision of goods in conformity with the contract
B1 Payment of the price
A2 Licenses, authorizations and formalities
B2 Licenses, authorizations and formalities
A3 Contracts of carriage and insurance
B3 Contracts of carriage and insurance
A4 Delivery B4 Taking delivery
A5 Transfer of risks B5 Transfer of risks
A6 Division of costs B6 Division of costs
A7 Notice to the buyer
B7 Notice to the seller
A8 Proof of delivery, transport document or equivalent electronic message
B8 Proof of delivery, transport document or equivalent electronic message
A9 Checking - packaging - marking
B9 Inspection of goods
A10 Other obligations
B10 Other obligations
jodyqig
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天津
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妍唐
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m
SIX MAIN TRADE TERMS
FOB---FREE ON BOARD (... named port of shipment)
FCA---FREE CARRIER (... named place) CIF---COST, INSURANCE AND FREIGHT (...
named port of destination) CFR---COST AND FREIGHT (... named port of
destination) CPT---CARRIAGE PAID TO (... named place of
destination) CIP---CARRIAGE AND INSURANCE PAID TO (...
named place of destination)
jodyqig
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天津
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m
FOB---FREE ON BOARD
"Free on Board" means that the seller delivers when the goods pass the ship's rail at the named port of shipment.
This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.
jodyqig
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THE VARIATIONS OF FOB
FOB liner terms FOB under tackle FOB stowed FOB trimmed FOB stowed and trimmed
jodyqig
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mCIF---COST, INSURANCE AND FREIGHT
"Cost, Insurance and Freight" means that the seller delivers when the goods pass the ship's rail in the port of shipment.
The Variations of CIF: CIF liner terms CIF ex ship’s hold CIF landed
jodyqig
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天津
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m
CFR---COST AND FREIGHT
"Cost and Freight" means that the seller delivers when the goods pass the ship's rail in the port of shipment.
The Variations of CFR: CFR liner terms CFR ex ship’s hold CFR landed
jodyqig
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天津
财经
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妍唐
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m
QUESTIONS FOR DISCUSSION
Try to compare the similarities and differences between FCA and FOB.
Try to compare the similarities and differences among FOB, CFR and CIF?
What’s the main function of trade term? When use CIF in international trade, why the
seller should pay special attention to issue shipment notice to the buyer timely?
Try to compare the following trade terms: DES and CIF Ex Ship’s Hold ; FAS and FOB Under Tackle
jodyqig
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天津
财经
大学
齐俊
妍唐
丽co
m LEARNING POINTS
The considerations of pricing The pricing methods Conversion of price under different trade
terms Composition of the price clause Calculation of commission and discount
jodyqig
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妍唐
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m
COST CONSIDERATIONS
Cost of productionCost of production
Selling and delivery costsSelling and delivery costs
Taxes and tariffsTaxes and tariffs
Variable costsVariable costs
Fixed costsFixed costs
Other concepts about costsOther concepts about costs
jodyqig
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PRICING METHODS
Break-even pricingBreak-even pricing
Marginal cost pricingMarginal cost pricing
Cost-plus methodCost-plus method
jodyqig
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天津
财经
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齐俊
妍唐
丽co
mPRICE CLAUSE IN SALES CONTRACT
Price clause in a sales contract comprises the currency of price, unit price, unit of measurement and trade term.
For example: For example:
RMB ¥ 130 per set FOB shanghai.
jodyqig
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天津
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齐俊
妍唐
丽co
m
CHOOSING OF CURRENCY
Export: hard currency
Import: weak currency
jodyqig
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天津
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PRICE STIPULATION
Floating pricingFloating pricing
Partially fixed pricePartially fixed price
Flexible pricingFlexible pricing
Fixed pricingFixed pricing
jodyqig
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天津
财经
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齐俊
妍唐
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m
QUESTIONS FOR DISCUSSION
Please stipulate the main factors that will affect the price of goods.
What is fixed and variable price? What is Break-even pricing? What is commission? How to stipulate
commission in the contact? What does the price clause include in the
contract? Do you know how to stipulate the price in the
contract?
jodyqig
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天津
财经
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齐俊
妍唐
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LEARNING POINTS
Instruments used in international payment
Basic procedure of payment by collection and L/C
Function of L/C and different kinds of L/C
jodyqig
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INSTRUMENTS
Examples of financial instruments are bills of exchange, checks, promissory notes, bill of lading, stocks, and so on.
InstrumentInstrument is a document that has monetary value, or is evidence of a financial transaction. InstrumentInstrument is a document that has monetary value, or is evidence of a financial transaction.
jodyqig
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BILL OF EXCHANGE
An unconditional order in writing addressed by one Person (the Drawee) to another (the Drawee)signed by the person giving it requiring the person to whom it is Addressed (the Drawee) ,who when he signs becomes the Acceptor to pay on demand , or at a fixed or determinable future time a sum certain in money to Or the Order Of a specified person , Or to bearer (the Payee).
An unconditional order in writing addressed by one Person (the Drawee) to another (the Drawee)signed by the person giving it requiring the person to whom it is Addressed (the Drawee) ,who when he signs becomes the Acceptor to pay on demand , or at a fixed or determinable future time a sum certain in money to Or the Order Of a specified person , Or to bearer (the Payee).
jodyqig
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PARTIES INVOLVES
The payeeThe payee
The draweeThe drawee
The drawerThe drawer
jodyqig
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TYPES OF DRAFTS
Sight bill and time/usance billSight bill and time/usance bill
Clean bill and documentary billClean bill and documentary bill
Banker’s bill &Commercial billBanker’s bill &Commercial bill
jodyqig
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PAYMENT METHODS
RemittanceRemittance
Letter of CreditLetter of Credit
CollectionCollection
jodyqig
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COLLECTION
The presentation for payment of an obligation and the payment thereof. Under collection,
the exporter takes the initiative to collect the payment from the buyer.
The presentation for payment of an obligation and the payment thereof. Under collection,
the exporter takes the initiative to collect the payment from the buyer.
jodyqig
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LETTER OF CREDIT
L/C is the most frequently used payment term in international trade transactions.
bank creditbank credit
A payment undertaking given by a bank to the seller and is issued on behalf of the applicant, i.e. the buyer.
A payment undertaking given by a bank to the seller and is issued on behalf of the applicant, i.e. the buyer.
jodyqig
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OTHER PAYMENT METHODS
FactoringFactoring
Letter of Guarantee (L/G)Letter of Guarantee (L/G)
jodyqig
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QUESTIONS FOR DISCUSSION What’s the parties involving in the draft? Try to explain the procedures and features of
collection briefly. What are the similarities and differences between
D/P, T/P and D/A? What should we pay attention to when using
collection? What is the content of the letter of credit? What
types of letters of credit are commonly used? Describe the procedures and features of L/C. What are the relationship between L/C and sales
contract? How many kinds of banker’s L/G are there? What
are they guaranteed respectively?
jodyqig
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天津
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LEARNING POINTS
Modes of cargo transport Different modes of marine transport How to calculate the freight of liners Transport documents The nature and chief content of B/L The varieties of B/L
jodyqig
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MODES OF TRANSPORTATION
Ocean Transport Railway Transport Air Transport Container transport International Multi-modal Transport Land Bridge Transport Other modes of transport
jodyqig
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TYPES OF OCEAN TRANSPORT
Charter transport or trampCharter transport or tramp
Liner transport Liner transport
jodyqig
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Liner
The main features main features of liners usually include: a regular line, port, timetable and comparatively
fixed freight, which is called “four regulationsfour regulations”. The ship owner usually leases part of shipping
space instead of the whole ship. The carrier is responsible for loading and
unloading operations, i.e , gross terms. The B/L drawn by the shipping company is the
shipping contract between the carrier and the consignor.
A vessel with regular sailings and arrivals in a stated schedule between specific ports
A vessel with regular sailings and arrivals in a stated schedule between specific ports
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COMPOSITION OF FREIGHT
basic chargesbasic charges
surchargessurcharges
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CHARTER TRANSPORT
Characteristics Characteristics of charter transport: No fixed courses 、 ports of loading and schedules No fixed freight The B/L is not an independent document. The harbor user fee 、 lading and unloading
charges and demurrage will be calculated according to the regulation of charter.
Always used in bulk cargoes
A freight-carrying vessel, which has no regular route or schedule of sailings. A freight-carrying vessel, which has no regular route or schedule of sailings.
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THREE KINDS OF CHARTER
Voyage charterVoyage charter
Time charterTime charter
Demise charterDemise charter
jodyqig
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RAILWAY TRANSPORT
High speed and economical Less prone to interruption by poor weather Less flexible (confined to railroads) Rail transport can be divided into
international combined rail transport and domestic rail transport.
jodyqig
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AIR TRANSPORT
Air transport offers quick transit of the goods with low risk of damage and pilferage, and very competitive insurance rates.
It is not restricted by ground conditions. It can also save packing cost and reduce
amount of capital tied up in transit. But it has limited capacity of overall dimensions together with weight restrictions.
It is especially suitable for transporting fresh, live, perishable, and seasonable goods.
It is the best choice for the carriage of goods with high value and limited dimensions.
jodyqig
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CONTAINER TRANSPORT
Containers are used to facilitate the transport of the goods.
Containers are constructed of metal and of standard lengths, mostly ranging from ten to forty feet.
The use of containers provides a highly efficient form for transport by road, by rail and air.
A containercontainer is a special box to carry freight, strengthened and stackable and allowing horizontal or vertical transfers.
A containercontainer is a special box to carry freight, strengthened and stackable and allowing horizontal or vertical transfers.
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mINTERNATIONAL MULTI-MODAL TRANSPORT
International multi-modal transport International multi-modal transport (internatio-nal combined transport) means the carriage of cargo by at least two modes of transport on the basis of a multi-modal transport contract from a place at which the cargos are collected in one country to a place designated for delivery in another country.
International multi-modal transport International multi-modal transport (internatio-nal combined transport) means the carriage of cargo by at least two modes of transport on the basis of a multi-modal transport contract from a place at which the cargos are collected in one country to a place designated for delivery in another country.
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OTHER MODES OF TRANSPORT
Parcel post transport Road transport Inland waterway transport Combined transport
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mSHIPMENT CLAUSE IN SALES CONTRACT
Time of Delivery Port of Shipment and Port of Destination Partial Shipment and Transshipment
Examples Examples of Shipping Clause: Shipment during Oct./Nov./Dec.20---, with
partial shipments and transshipment allowed.
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WAYS OF DELIVERY
Physical delivery or actual deliveryPhysical delivery or actual delivery
Constructive delivery or symbolic deliveryConstructive delivery or symbolic delivery
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mWAYS OF STIPULATING THE TIME OF DELIVERY
Stipulate the definite time of deliveryStipulate the definite time of delivery
Stipulate the goods shall be shipped without a fixed timeStipulate the goods shall be shipped without a fixed time
Stipulate a fixed period of timeStipulate a fixed period of time
Stipulate the goods shall be shipped in the near futureStipulate the goods shall be shipped in the near future
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SHIPPING DOCUMENT
Bill of Lading Sea Waybill Air Waybill Multi-modal Transport Document
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BILL OF LADING
Bill of lading, Shortened as B/L, is issued by the captain or the shipping companies to testify that the goods have been received or shipped on board for delivery to a certain place of destination.
Bill of lading, Shortened as B/L, is issued by the captain or the shipping companies to testify that the goods have been received or shipped on board for delivery to a certain place of destination.
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NATURES OF B/L
B/L is a receipt for the goods issued by the ship owner or his agent evidencing the receipt of the goods mentioned in B/L.
B/L is a receipt for the goods issued by the ship owner or his agent evidencing the receipt of the goods mentioned in B/L.
B/L is evidence of the contract of carriage between the consignor and the shipping company.
B/L is evidence of the contract of carriage between the consignor and the shipping company.
B/L is a document of title to the goods. B/L is a document of title to the goods.
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QUESTIONS FOR DISCUSSION How do liners operate? Please explain the calculation of the liner
freight. What is the difference between a liner and a
tramp? What is the advantage of air transport? What is the function of transport document? What is the nature and function of B/L? why is a straight B/L unnegotiable? What is the difference between physical
delivery of goods and symbolic delivery of goods?
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LEARNING POINTS
Why we need marine insurance The definition of losses, risks and expenses The procedure of marine insurance How to stipulate the insurance clause in sales
contract
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PARTIES TO INSURANCE
Insured Insured
Insurer Insurer
Insurance brokerInsurance broker
ClaimantClaimant
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MARINE INSURANCE
Losses Losses
Risks covered by marine insurance Risks covered by marine insurance
ExpensesExpenses
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mRISKS COVERED BY MARINE INSURANCE
Perils of Sea Perils of Sea
Extraneous Risks Extraneous Risks
Risk is a cause to the loss of or damage to the goods. There are two kinds of risks covered under marine cargo insurance: Perils of Sea and Extraneous Risks
Risk is a cause to the loss of or damage to the goods. There are two kinds of risks covered under marine cargo insurance: Perils of Sea and Extraneous Risks
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SCOPE OF INSURANCE COVERAGE
F.P.A (Free from Particular Average) F.P.A (Free from Particular Average)
W.A. (With Particular Average) W.A. (With Particular Average)
All Risks All Risks
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SCOPE OF INSURANCE COVERAGE
General additional risks General additional risks
Special additional risks Special additional risks
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QUESTIONS FOR DISCUSSION
What is the function of cargo transport insurance? How many risks are there in marine cargo insurance? Explain the difference between Actual Total Loss and C
onstructive Total Loss. What does General Additional Risks cover? Under which insurance coverage will the insurerecove
r the loss caused by fire?
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LEARNING POINTS
The definition of Claim, Force Majeure and Arbitration
How to stipulate the arbitration clause in the contract
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DISPUTES AND CLAIMS
Reasons for disputes:
Breach of the contract by the seller. Breach of the contract by the seller.
Breach of the contract by the buyer.Breach of the contract by the buyer.
Unclear contract stipulations.Unclear contract stipulations.
failed to make delivery or failed to make delivery according to the shipment date stipulated in the
contract; delivered the goods that does not conform to the contract or
the L/C etc.fail to open the relevant L/C
according to the stipulation in the contract. Fail to dispatch the ship
in time under FOB or refuse to accept the goods without good
reasons.
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CLAIM
A demand made upon a person for payment on account of a loss sustained through its negligence.
A demand made upon a person for payment on account of a loss sustained through its negligence.
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FORCE MAJEURE
Force majeureForce majeure literally means “greater force”. In international trade, force majeure means any foreseeable events beyond the parties’ control, which prevent the performance of any obligation under the contract.
Force majeureForce majeure literally means “greater force”. In international trade, force majeure means any foreseeable events beyond the parties’ control, which prevent the performance of any obligation under the contract.
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ARBITRATION
A means of settling a dispute between two parties through the medium of a third party who is not partial to either of the parties to the dispute, and whose decision on dispute is final and binding.
A means of settling a dispute between two parties through the medium of a third party who is not partial to either of the parties to the dispute, and whose decision on dispute is final and binding.
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ARBITRATION CLAUSE
Specify an arbitration tribunal to which a dispute will be submitted.
How the cost of the arbitration is to be divided.
The scope of arbitration.
Location for arbitration.
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QUESTIONS FOR DISCUSSION
When do the disputes arise in international trade?
When a claim is justified, how shall we settle it?
What is Acts of God? What’s the procedure of arbitration? What shall an arbitration clause be?
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LEARNING POINTS
The basic procedure of export and import The procedure of business negotiation, The definition of offer and the difference
between a firm offer and non-firm offer
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mTHE PERFORMANCE OF EXPORT CONTRACT
Getting the goods ready Examining the L/C Amending the L/C Shipping Custom Clearance Arranging the insurance Preparing the Required Documents and
Getting Paid
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BASIC PROCEDURE OF IMPORT
Applying for import license Opening L/C Preparing for shipment Arranging insurance and payment Import inspection and custom clearance
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QUESTIONS FOR DISCUSSION Before business negotiations, what
preparations should the seller make? What is the basic procedure of export? Briefly tell the four requirements that a firm
offer must satisfy. What is an offer without engagement? Can an offer be withdrawn or revoked after it
has been delivered? What does acceptance mean? How to examine a L/C? Why is it necessary for an exporter to make
the amendment to a L/C?
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LEARNING POINTS
The main forms of international trade What are Agency, Distribution and
Consignment What is futures trading? The main forms of Counter Trade
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m AGENCY, DISTRIBUTION AND CONSIGNMENT
Distribution Distribution
AgencyAgency
ConsignmentConsignment
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DISTRIBUTION
Wholesaler Wholesaler
DistributorDistributor
RetailerRetailer
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CONSIGNMENT
Consignment Consignment refers to a kind of trading method in the form of commissioned sales, also a normal practice in international trade. Namely, the principal (consignor, i.e. exporter) firstly transports the goods to the place of consignment, and a foreign sales agent (consignee) is commissioned to sell goods on behalf of the owner according to the terms specified in the consignment agreement.
Consignment Consignment refers to a kind of trading method in the form of commissioned sales, also a normal practice in international trade. Namely, the principal (consignor, i.e. exporter) firstly transports the goods to the place of consignment, and a foreign sales agent (consignee) is commissioned to sell goods on behalf of the owner according to the terms specified in the consignment agreement.
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FUTURES TRADING
Introduction to Futures Trading Introduction to Futures Trading
Why Trade a Futures ContractWhy Trade a Futures Contract
Futures MarketFutures Market
Futures ContractFutures Contract
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COUNTER TRADE
Counter trade refers to any one of many different arrangements by which goods and services are traded for each other, on either a bilateral or a multilateral basis.
Counter trade refers to any one of many different arrangements by which goods and services are traded for each other, on either a bilateral or a multilateral basis.
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OFFSET
The overall objective of offset, either direct or indirect, in the defense sector generally to promote import substitution and to minimize the balance of payments deficit for military purchases by developing an indigenous industrial defense capability.
The overall objective of offset, either direct or indirect, in the defense sector generally to promote import substitution and to minimize the balance of payments deficit for military purchases by developing an indigenous industrial defense capability.
Offset means that the exporter agrees to use goods and services from the buyer’s country in return for the products being sold.
Offset means that the exporter agrees to use goods and services from the buyer’s country in return for the products being sold.
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BARTER Barter is one of the most common and oldest met
hods of counter trade. In a barter deal, goods are exchanged for goods—
the principal export is paid for with goods (or services) from the importing market.
In international trade, a certain amount of foreign exchange is indispensable. For countries which do not have enough foreign exchange, they can solve the problem by choosing barter trade.
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mREASONS FOR COUNTER PURCHASE
To stimulate exportsTo stimulate exports
To alleviate the balance of payment deficit resulting from imported goods.
To alleviate the balance of payment deficit resulting from imported goods.
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COMPENSATION TRADE
This practice is most common with exports of process plant, mining equipment and similar orders.
Buyback arrangements tend to be much longer term and for larger amounts than counter purchase or barter deals.
Compensation trade Compensation trade or buyback buyback means suppliers of capital plants or equipments agree to be paid by the future output of the investment concerned.
Compensation trade Compensation trade or buyback buyback means suppliers of capital plants or equipments agree to be paid by the future output of the investment concerned.
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SWITCH TRADE
Switch may involve at least three parties, or even four or five parties.
It is closely linked with the bilateral clearing agreements, a kind of basis for barter transactions between governments.
SSwitch trade witch trade is exporting and importing through a third nation, where the currency paying for the goods can be easily exchanged into one acceptable to the seller.
SSwitch trade witch trade is exporting and importing through a third nation, where the currency paying for the goods can be easily exchanged into one acceptable to the seller.