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Chapter 1 - Overview of International Payment

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181 views

Chapter 1 - Overview of International Payment

Uploaded by

Hồng Phụng
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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18/12/2023

INTERNATIONAL PAYMENT

PHAN VŨ NGỌC LAN – MDE


International Business
Administration Department
[email protected]

Chapter 1

OVERVIEW OF
INTERNATIONAL PAYMENT

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In this chapter
1. Definitions and features
2. Roles of International Payment
3. Legal framework regulating International
Payment
4. Conditions for International Payment
5. Parties involved in International Payment

1. Definitions and Features


 Foundation basis
 Definitions
 Features

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1.1. Foundation basis


Transportation in
Foreign Trade

Insurance in
Foreign Trade

International
Foreign Trade
Payment
Operation
Foreign
exchange

Law in
International
business
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1.2. Definitions
 International payment is the execution of
payment duties and beneficial interest based
on economic and non-economic activities
between organizations and/or individuals
from 2 countries or more; or between a nation
and international organizations, via banking
relation in revelant countries.

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1.2. Definitions
 Trade payment
 Non-trade payment

1.3. Features
 International Payment is governed by internation
law and practices.
 International Payment is conducted mostly via
banking system.  At least 2 banks would
participate.
 Cash is not mostly used in International payment.
 At least one party use a foreign currency (except
for the case of Common currency)
 English is the main language in International
payment.
 Dispute settlement by arbitrators or courts base on
both sides’ agreement.
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2. Roles of International
Payment
 For the economy
 For international businesses
 For commercial banks

2.1. For the economy


 Enhancing a country’s Foreign trade
operation
 Enhancing FDI and FPI
 Expanding services: tourism, international
cooperation, ...
 Attracting Remittance (transfer of money by
a foreign worker to an individual in his or her
home country) and other financial resources.
 Enable national financial market to integrate
globally.
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2.2. For Exporter/Importer


Ownership / Title

Goods

Exporter Importer

Payment

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2.2. For Exporter/Importer

Giáo trình Thanh toán Quốc tế và Tài trợ Ngoại thương, GS., TS. Nguyễn Văn Tiến, TS.
Nguyễn Thị Hồng Hải, Nhà xuất bản Thống kê, 2015.

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2.3. For commercial banks


 Domestic operations
 International Operations
1. International Payments
- Advanced payment
- Open account
- Remittance
- Collections
- Documentary Credit
2. FOREX Trading
3. Trade finance
4. Bank’s Guarantee in International Trade
5. International credit
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Service fee (Dong A Bank)

14

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Service fee (Dong A Bank)

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3. Legal framework regulating


International payment
1. International treaties

2. National Laws

3. International practices

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Article 6 – Law on Negotiable


instruments 2005
Application of international treaties and international
commercial practices with respect to negotiable instrument
relationships involving foreign elements
1. Where an international treaty of which the Socialist Republic of
Vietnam is a member contains provisions which are different
from the provisions in this Law, the provisions of such
international treaty shall prevail.
2. In the case of negotiable instrument relationships involving
foreign elements, the parties to the negotiable instrument
relationship may agree to apply international commercial
practices, including the International Chamber of Commerce's
Rules on uniform practice for documentary credits and the
Uniform Rules on collection, and other relevant international
commercial practices in accordance with regulations of the
Government.
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Article 6 – Law on Negotiable


instruments 2005
3. Where a negotiable instrument is issued in Vietnam but is
accepted, guaranteed, endorsed, pledged, collected, paid or
subject to recourse or legal action in another country, such
negotiable instrument must be issued in accordance with the
provisions of this Law.
4. Where a negotiable instrument is issued in another country
but is accepted, guaranteed, endorsed, pledged, collected,
paid, or subject to recourse or legal action in Vietnam, the
acceptance, guarantee, endorsement, pledge, collection,
payment, recourse or initiation of a legal action shall be
subject to the provisions of this Law.

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Điều 6 – Luật các công cụ chuyển


nhượng 2005
Áp dụng điều ước quốc tế và tập quán thương mại quốc
tế trong quan hệ công cụ chuyển nhượng có yếu tố
nước ngoài
1. Trong trường hợp điều ước quốc tế mà Cộng hoà xã hội
chủ nghĩa Việt Nam là thành viên có quy định khác với quy
định của Luật này thì áp dụng quy định của điều ước quốc tế
đó.
2. Trong trường hợp quan hệ công cụ chuyển nhượng có
yếu tố nước ngoài, các bên tham gia quan hệ công cụ
chuyển nhượng được thoả thuận áp dụng các tập quán
thương mại quốc tế gồm Quy tắc thực hành thống nhất về tín
dụng chứng từ, Quy tắc thống nhất về nhờ thu của Phòng
Thương mại quốc tế và các tập quán thương mại quốc tế có
liên quan khác theo quy định của Chính phủ.
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Điều 6 – Luật các công cụ chuyển


nhượng 2005
3. Trong trường hợp công cụ chuyển nhượng được phát
hành ở Việt Nam nhưng được chấp nhận, bảo lãnh, chuyển
nhượng, cầm cố, nhờ thu, thanh toán, truy đòi, khởi kiện ở
một nước khác thì công cụ chuyển nhượng phải được phát
hành theo quy định của Luật này.
4. Trong trường hợp công cụ chuyển nhượng được phát
hành ở nước khác nhưng được chấp nhận, bảo lãnh,
chuyển nhượng, cầm cố, nhờ thu, thanh toán, truy đòi,
khởi kiện ở Việt Nam thì việc chấp nhận, bảo lãnh, chuyển
nhượng, cầm cố, nhờ thu, thanh toán, truy đòi, khởi kiện
được thực hiện theo quy định của Luật này.

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4. Conditions for International


Payment
 Currency terms
 Place of payment
 Time of payment
 Mode of payment

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4.1. Currency terms


 Kinds of currency: Accounting currency /
Payment currency / ...
 Foreign exchange risk management

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4.1.1. Kinds of currency


 Based on usage scale
- National currency
- International currency
- World currency

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4.1.1. Kinds of currency


 Based on convertibility
- Freely convertible currency
- Internal convertible currency
- External convertible currency (full / partial)
- Non-convertible currency

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4.1.1. Kinds of currency


 Based on forms of existence
- Cash
- Credit currency
 Based on popularity in international payment
- Strong currency
- Weak currency
 Based on purpose of using in international
payment
- Accounting currency
- Payment currency
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4.1.2. Foreign exchange risk


management
 Forward contract
 Swap
 Options
 Futures contract

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4.2. Place of payment


 Exporter’s country
 Importer’s country
 Third party’s country

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4.3. Time of payment


 Advance payment / Down payment
 Prompt / Immediate payment
- COD: Cash on Delivery
- COB: Cash on Board
- CAD: Cash against Documents
- COR: Cash on Receipt of cargo
 Deferred payment

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4.4. Mode of payment


 Mode of payment: process and conditions,
via banking system, for the buyer to make
payment and receive goods; and the seller to
deliver and receive money based on their
international sale contract.

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4.4. Mode of payment

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5. Parties involved in
International Payment
 The Buyer, Seller, Manufacturer and their
Agents
 Banks
 Carrier
 Insurer
 Government and commercial authorities

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THANK YOU FOR YOUR LISTENING

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