Chương 1

1.73. Meaning of calculation currency and payment currency. They do not need to
be the same in a sales contract.
Calculation currency is used to demonstrate unit price as well as the sales contract value.
Payment currency is used to pay off the sales contract value.
They do not need to be the same in a sales contract : False. Because the Definition
of Terms and conditions of currency:
Terms and conditions of currency means consistent agreement on using a certain
currency unit to calculate and pay in foreign trade contracts, at the same time reaching a
consensus on measures to deal with determined currency ‘s fluctuation
according to incoterm 2020
1.86. Who is responsible for contracting for means of transportation under CFR, CIF,
CPT, CIP, DAP, DPU, DDP
The seller according to incoterm 2020
1.87. Who is responsible for contracting for means of transportation under EXW,
FCA, FAS, FOB
The buyer according to incoterm 2020
1.88. The terms of Incoterms 2020 are only applicable for sea and inland waterways
transportation
FAS, FOB, CFR, CIF
1.89. The terms of Incoterms 2020 are applicable for any modes of transportation
EXW, FCA, CPT, CIP, DAP, DPU, DDP
1.90. The terms of Incoterms 2020 specify that the point where risk passes from the
seller to the buyer is at place of departure
1.91. Terms of Incoterms 2020 specify that the point where risk passes from the seller
to the buyer is at place of destination
=> 90 + 91 => ECW, FCA, FAS, FOB, CFR, CIF, CPT, CIP at departure
DAP, DPU, DDP at destination.
1.92. Terms of Incoterms 2020 specify the seller is responsible for export clearance
All, except EXW
yes
The seller must carry out and pay for all export clearance according to incoterm.
1.97. Incoterms 2020 is an optional legal document
yes, it is optional, if parties want the Incoterms® 2020 rules to apply to their contract,
the safest way to ensure this is to make that intention clear in their contract
The Incoterms are not mandatory rules – for them to receive legal effect, they must be
explicitly incorporated by the parties into their contract. The Incoterms rules are made
legally binding by incorporation into a contract of sale, and the rules make it clear that
best practice is always to refer to a specific edition of the rules.
1.284. Who is disadvantageous as Payment Currency increases
It will be a hardship for the buyer
The buyer will get the disadvantageous
1.285. Who is beneficial when Payment Currency decreases
A decreases of Payment currency can leads to a drop in the price of
exported products. The quantity of products sold abroad increases as
these products become more affordable to a greater number of
consumers overseas.
The buyer get the beneficial
1.81. Currency selection principles in international payments. Currencies are popular
in international payments.
yes, and yes, the hard currencies (such as the US dollar, the euro, British pounds or
Japanese yen) are normally used

- Exporter’s currency
- Importer’s currency
- Third country’s currency
- Calculation currency and payment currency
Currencies are popular in international
payments:EUR,GBP,CHF,JPY,USD,HKD,AUD.

1.82. Factors determining the payment time to be advance payment, at sight payment
and deferred payment in international payments
Yes, the factors determine: advanced payment: how much money buyer want to pay in
advanced
At sigt paymet: where the payment is made
 Defferd payment: when the payment is made

-payment instrument : cash, check, B/E , promissory note, Payment card

-method of payment : remittance (chuyển tiền),collection (điều thu), documentary credit (tín
dụng chứng từ), open account (ghi sổ).

1.84. When should “Payment in Advance” be used in International Trade?

Advance payment or prepayment means buyer pays in advance part or total
amount of the contractually due sum for goods or services prior to delivery date
Advance payment of term in exports and imports is picked by a purchaser
only when he knows the seller in details on genuineness as a seller.
1.85. Roles of Incoterms in international trade
Incoterms rules, for nearly a century, have facilitated the conduct of commercial
transactions.  The purpose of Incoterms is to provide a complete system of rules
for the interpretation of the most widely used commercial terms.  The
inconsistencies in the interpretation of these conditions in different countries can
therefore be avoided or at least significantly reduced.  The reference to
Incoterms in the sales contract clearly defines the obligations of the parties to
minimize and conveniently settle disputes arising from the sales contract,
especially the contract between the parties in different countries.  There are
many Incoterms rules suitable for many different modes of transport,
different ways of dividing risks and costs between the seller and the buyer. 
The parties, therefore, can choose the rule that best suits their abilities and
desires.

Incoterms rules also offer considerable assistance to traders who are new to and
not knowledgeable about international trade. By using Incoterms rules for
contracts, a degree of certainty regarding the liability of the seller and the buyer
can be achieved to reduce the disadvantages. In addition, these rules ensure a
reasonable balance between the rights and obligations of the parties to prevent
disputes from occurring. Even when a dispute does arise, Incoterms help the
parties as well as the mediator and adjudicator to significantly reduce the time
and effort to clarify some issues. As a result, the standardization of trade terms
 can facilitate businesses by minimizing transaction costs and reducing trade
risks.

1.124. Terms of the Incoterms 2020 specify that the seller assumes the least
responsibilities, most responsibilities
the seller assumes the least responsibilities: EXW
most responsibilities: DDP
1.125. Terms of the Incoterms 2020 specify that the buyer assumes the least
responsibilities? The most responsibilities
the buyer assumes the least responsibilities: DDP
The most responsibilities: EXW
1.290. Challenges in doing business with foreign parties

Geography and transportation (if u are exporter)

One of the first exporting challenges that you might have to deal with is the distance. If
you are planning to export your goods to a country that is far away from your location,
the process can get a bit complicated. Especially if the country is in a different continent
and therefore, a different system can be utilized. And the longer the distance gets, the
more complex transportation gets.

Payment methods

The payment method is very important when it comes to international trading. Some
countries might not share the same fiscal system with your country. And you will need
help and assistance when trading with such countries. There are also some international
forms of payment that will cover such situations, but they need to be present in both
countries

Different law form

Some countries have a complex bureaucratic system that requires a variety of documents
and certificates. You might need to obtain certain licenses and permits when you export
to certain countries. The most important problems of import and export come from a bad
legal system in one country or another. You might be restricted when it comes to
advertising your goods or the quantity that you want to export which mean u will lose ur
goods one way or another.

 Finding the right partner( I think this is crucial difficulty)

most important part to take care of as an international trader is finding the right partner.
Your important will be your partner in the entire process, and they can become a blessing
or a curse for you. Always pay attention when you decide to do business with ur partner
or another and do your best to avoid possible local scams. The risk of scams is present in
every country that you want to deal with, but you can still avoid it. Your lawyer can also
help you with finding a trustful importer by researching their past activity.

- different culture lead to different perspective in doing business

When you are exporting into a new country, you need to consider their culture and
traditions. It may happen especially if you are exporting goods like food or even clothes.
For instance, certain types of meat might not be allowed to some countries due to cultural
limitations. Or some clothes might not be allowed, especially when it comes to women. It
is crucial to do your research on local traditions and adapt your export-import process to
that.

- language barrier (translators and interpreters are often needed) 

Language barriers can be a real issue when trading internationally. If your partner
doesn’t speak the same language things might be lost in the translation. The main
trading language can be used in English. However, many countries don’t have English
as their national language, so ur partner might use different translation programs to
communicate with you. You can still make a deal as long as you keep the language
simple and as standard as possible. Hiring a translator will save you from a lot of
struggle when it comes to communication problems
 1.291.- 1.292. Concerns and Issues of importers and exporters in International Trade

Lack of Knowledge on Exchange Rates

If you don’t know the exchange rates when trading internationally, you are exposed to
potential currency fluctuations and are restricted when planning ahead or trying to get the
best price. 

Being Clueless About Import Restrictions or Control on a Product

Import restrictions comprise of quotas, import licensing requirements and so forth.

Importing goods that violate quota restrictions or are unsafe could end up costing you
money in fines and penalties, and that will erode your profits

Never Verifying the Reputation and Legitimacy of a Supplier or Customer

If u don’t find out about ur partner whis can lead to a huge risk which affect ur profit , if
ur partner have low reputation high chance they will not pay for the goods or unable to
pay the goods or in worst case when u send the money to them but u might got scam and
lose ur goods.

 Failure to Conform to Packaging, Marking, and Language (Localization) Laws

This will also effect ur shipment period to ur partner ,u will unable to ship the goods on
time to the partner and ur company reputation will be afftect

1.126a - 1.126b. differences between companies from different countries

participating in international trade and In Payments.
1. 126a - 1.126b. Methods to hedge these risks.
In international trade:
National laws differ between parties, customs and culture will be diff, diff languages and
currencies
In international payment: exchange risk, country risk
Solutions: Transact in your own currency, Build Protection into Your Commercial
Relationships/Contracts,

A natural foreign exchange hedge occurs when a company is able to match revenues and
costs in foreign currencies such that the net exposure is minimized or eliminated. For
example, a US company operating in Europe and generating Euro income may look to
source product from Europe for supply into its domestic US business in order to utilize
these Euros

Forward exchange contracts, currency option

Importers and exporters will often use currency forwards to hedge against exchange rate
fluctuations. They will enter into a currency forward contract with a bank or other
financial institution. This binding over-the-counter (OTC) contract locks in the exchange
rate for the purchase or sale of a specific currency on a future date
1.129. The roles of correspondent banking system in supporting customer to improve
their business
-Correspondent bank act as an agent of the respondent bank.
-Correspondent banks offer the following services, such as Treasury, clearance of
cheques, drawing of demand drafts, process documentation, foreign exchange,
financing, managing international investments, and more.
-The correspondent bank charges a specific fee for its services to the respondent bank.
-Services of a correspondent bank are usually needed for international financial
transactions that require foreign currency exchange.
1.131a - 131b. The roles of commercial banks in minimizing risk in customer’s
business activities
Banks perform a variety of miscellaneous functions on behalf of their customers:
-They act as agents for the purchase of shares and securities,

-They collect and pay bills,

-They can be appointed trustees, executors and administrators of estates.

-They keep valuables in safe custody.

-They issue letters of credit and traveller’s cheques,

-They arrange for transfer of money from one place to another by banker’s draft or
otherwise,

-Some banks deal in foreign exchange and foreign moneys can be obtained through them,
subject to the foreign exchange regulations of the countries concerned.

1.132. Risks to exporters and importers in international payments and methods to hedge
these risks.
Kind of risk
A) Risks relating to the
participant states of
contract
Production risks
Loan risks
B) Risks relating to the
economic or political
situation of constrictixe
or other counties
Political risks
Risks in transmission
Accrued losses
For exporter For importer
Cancel or modification of Inefficiency of seller to
requisition from the realize a contract for
customer side. technical and financial
reasons. Unwillingness of
seller to realize a contract.
Payment disablement and Inefficiency and
unwillingness of purchaser unwillingness of seller to
to pay. recover payments.
Political events or Political events or
arrangements (e.g. wars, arrangements (e.g. wars,
revolutions etc.) Consumer revolutions etc.) Seller is
is unable to transport a unable to transport or send
product. the product.
Refusal or inefficiency of Any facilitation of
state or local bodies to payment in consequence of

Exchange rate risks
enforce the payment in
agreed currency.
Depreciation of a currency
used in contract in
comparison with the
currency of seller´s
country.
security or refund.
Overestimation of the
currency used in contract
in comparison with the
currency of customer´s
country.

methods to hedge these risks:

-research or find out the information about ur counterparty (exporter. importer) to figure
if they have a problem or not (problem about their political system ,culture, reputation) to
make decision to do a business with them.
- Choose the least risky form of international payments (like cash in advance)
Revise
1: According to point e, article 28, UCP 600:
“The date of the insurance document must be no later than the date of shipment,
unless it appears from the insurance document that the cover is effective from a
date not later than the date of shipment” we have:
Insurance policy 1 , it can match both of the B/L
Insurance policy 2 ,it can match the B/L 1 but with the B/L 2 there will be 2 dif
cases
case 1 the B/L is shipped on board then then it will match
case 2 the B/L is receipt for B/L then it will not comply which mean not match

2:
1. The version of UCP was applied is the ucp 600 because:
 - First the issuing date was 16/04/2020, mean that this docs issued in
2020
- L/C was subject to the latest version of UCP => the latest version of
UCP in 2020 is UCP 600
2. According to point e, Article 6, ucp 600:” Except as provided in sub-article
29 (a), a presentation by or on behalf of the beneficiary must be made on or
before the expiry date.” => the presentation must be made on or before
5/06/2020

 “Stale documents were acceptable” means documents presented beyond the

21 days after the date of shipment are acceptable provided they are
presented before the expiration date of the credit.

 Bill of Lading Date = the date on which the bill of lading is issued.

 “30 days after sight” means that the drawee has 30 days from the
date of presentation of the draft to make payment.

 Bill at Sight – Due date is the date on which a bill is presented for the
payment.

 Bill after Sight –Here, the due date is the date of acceptance plus terms of
the bill. For example, if the bill is drawn on 1st March and it is accepted on
5th March. In that case, if the maturity of the bill is 1 month after sight.
Then the due date would be 5th March + 1 month = 5th April.

 Bill after Date – Here, the due date is the date of drawing plus the terms of
the bill. For example, if the bill is drawn on 1st January and its maturity is
30 days after date then its due date would be 1st January + 30 days = 31st
January.

 “L/C is available with.. by negotiation”: For a credit available by

negotiation, a nominated bank that agrees to act on its nomination may
advance funds when it determines that the presentation is complying, or set
a date by which to advance funds according to its estimation of when
reimbursement will be received.

Mối quan hệ giữa:

- Ngày giao hàng và ngày bảo hiểm: “The date of the insurance document
must be no later than the date of shipment, unless it appears from the
insurance document that the cover is effective from a date not later than
the date of shipment”
- Ngày phát hành chứng từ với L/C (ngày phát hành, hết hạn hiệu lực,
ngày xuất trình):

Incoterms 2020, compare to Incoterms 2010

1.Change of responsibilities and obligations under CIP/CIF

CIF (Cost-Insurance-Freight) and CIP (Carriage and Insurance Paid to)
require the seller to purchase a certain amount of insurance for the buyer
equivalent to term C (under the terms of insurance established by the
London Insurance Association). promulgate). However, these two terms
often involve different types of goods and require different levels of
coverage. learn import and export
During the Incoterms 2020 session, the ICC tried to clarify this difference
and increase the seller's obligation to insure the shipment under two terms
CIF and CIP. Accordingly, the CIF term will have the same insurance claim
(term C) but the CIP term will be increased the coverage level to A.
Corresponding to this change, the buyer will be given additional rights.
benefits will lead to an increase in insurance premiums.

Therefore, we clearly see the difference, if in Incoterms 2010, the seller

only buys insurance at a minimum level of ICC (C) and allows the parties
to agree to be able to buy at a high level. In addition, in the new version of
Incoterm 2020, the seller can only buy up to ICC (A) and allows the parties
to agree on the purchase of insurance at a lower level.

2.Condition DAT converts to DPU

DAT (Delivered-at-terminal) will be replaced by DPU (Delivery-at-Place
Unloaded), this means that the seller will be responsible for delivery and
pass the risk on to the buyer once the goods have been unloaded. onto the
means of transport at the named place of delivery. DPU is quite similar to
DAP when adding unloading regulations. official

3.Add “On-Board” option to FCA terms

When transporting goods under FCA (Free Carrier) terms, the buyer and
seller can agree and require the presentation of the on-board bill of lading
after the goods are loaded on board for payment with the bank.

4.Security Requirements
As far as transport security obligations are concerned, as mandatory
screening of containers is becoming more and more common, these costs
are included in shipping charges. Incoterms 2010 covered responsibilities
for security requirements and associated costs, but the 2020 version makes
these obligations even more noticeable. Le Anh import and export center

5.Seller/buyer use their own means of transport

Parties can use their own means of transport when agreeing on terms of
FCA, DPU, DAP and DDP. Incoterm 2010 assumes that the carriage of
goods will be done by a third party. It does not address the situation where
the seller or the buyer uses their own means of transport, such as trucks.
Incoterms 2020 clarifies this issue. For example, a buyer under FCA
Incoterms 2020 is obliged to contract or arrange for the carriage of the
goods from the named place at their own expense
Nội dung cơ bản của B/E (contents)
(1) Bill of Exchange title
(2) Bill of Exchange number (code of the B/E)
(3) A definite sum of money = Payment order or Unconditional acceptance
According to VN law :
-case 1 : number and words are dif
Smallest amount written by words are legal
-case 2 : number are wrote 2 times and they’re dif : smallest amount written
in numbers are acceptable
(4) Place of issue (sometime we cant find it) -> have to look at the drawer
(10) to see if there’s a place of issues and full address of drawer
(5)Date of issue
(6) Time of payment
(7) Beneficiary (optional – non mandatory)
(8),(9) Name and address of drawee
(10)Name, address and signature of the drawer
All of content are compulsory except (7) u can have the name of
beneficiary or not in B/E

Quy định của ULB, Luật các công cụ chuyển nhương của Vn về số tiền,
ngày tháng, tiêu đề, địa điểm ký phát (title , time of payment , amount
of money, place of draw)
ULB
According to article 1 in ULB
The title of B/E shall appear on the face of the B/E and shall be expressed
in the language of its drawing.
According to article 6 in ULB
When the amount of money in a bill of exchange is expressed in words and
at the same time in numbers, and there is a difference between the two
parties, the amount in words is the amount to be paid.
When an amount of a bill of exchange expressed entirely in words has a
larger number, or an amount expressed purely in numbers has a larger
number, the smaller amount is the amount to be paid.
According to article 2 in ULB
A bill of exchange which lacks one of the requirements set forth in the
foregoing shall be void, except in the following cases:

– A bill of exchange in which the time of payment (thời gian thanh toán) is
not specified shall be deemed payable upon presentation.

– When there is no clearly stated place of payment (địa điểm thanh toán),
the place indicated next to the name of the payer is considered to be the
place of payment.

– A bill of exchange without a place of drawing (địa điểm ký phát) shall be
deemed to have been drawn at the place indicated next to the name of the
drawer.
There has not been any official legal documents since 1936
Negotiate instrument Law 2005:
Title (not show in it)
Point 3 and 4 Article 6
3. In case a negotiable instrument is issued in Vietnam but is accepted,
guaranteed, transferred, pledged, collected, paid, recourse, or sued in
another country, the negotiable instrument must issued in accordance of this
Law.
4. In case a negotiable instrument is issued in another country but is
accepted, guaranteed, transferred, pledged, collected, paid, recourse, or
sued in Vietnam, the acceptance and guarantee shall be , transfer, pledge,
 collection, payment, recourse and lawsuits shall comply with the provisions
of this Law.
Article 7 Law of transfer instruments 2005
1. The time limit for payment, the time limit for sending the notice of
recourse and the statute of limitations for initiating a lawsuit when there is a
dispute over the negotiable instrument relationship shall include public
holidays and weekends; if the last day of the time limit falls on a holiday or
weekend, the last day of the time limit is the next working day immediately
following that holiday or weekend.

2. The specific payment term of each negotiable instrument shall be

determined by the drawer and issuer and written on the negotiable
instrument in accordance with this Law.

3. The time limit for sending a notice of recourse and the statute of
limitations for initiating a lawsuit when the negotiable instrument is refused
acceptance or payment is refused in accordance with Articles 50 and 78 of
this Law
Article 8. Amount of payment on negotiable instrument
The amount paid on the negotiable instrument must be written in numbers and
words.

Các loại B/E (type)

a. Accompanied documents
o Clean B/E
o Documentary B/E good for exporters

b.Transferability (which one is best for dollar?)

o Nominal B/E (best for dollar)
o Bearer B/E
o Order B/E

c. The drawer
o Trade bill: a time draft or bill drawn by a seller on the buyer for value of
goods sold under credit sale (signed)
o Bank bill an instrument signed by a bank agree to pay amount of money
depend on investors (refer the money market)

d.Time of payment
o At sight bill : best for drawer because the drawee have to pay them
Immediately the moment importer banks received the B/E
o Time bill is good for drawee cuz they have time to prepare the payment
for the drawer

Ký hậu, chấp nhận B/E

Accept B/E :
The draft, after being drawn, must be presented to the drawee for the
drawee to sign to accept payment, especially for time drafts. Obviously, a
signed bill of exchange has credit for payment.

A bill of exchange is normally addressed to the drawee, who can sign for
acceptance at any time before the expiry date for presentation of the draft.
The acceptance period can be interpreted in two cases:

The first case: unless otherwise specified by the two parties, the ULB
stipulates that the acceptance period is 12 months from the date of drawing
the draft. where to learn import and export?
Second case: if the two parties have specified in the contract of sale or in
the letter of credit a specific time limit for presentation of the draft for
acceptance, the draft must be presented for acceptance within that period. .
indicated on the front, lower left hand corner of the bill of exchange
and is executed with the word "accepted" written next to the signature
of the drawee ULB also allows the payer to use other similar words to
indicate their acceptance such as “confirm”, “agree”, “agree to pay”.

However, the drawee still has the right to refuse to accept payment of
the bill of exchange, if such refusal is justified with just cause, for
example: the goods actually received are not in accordance with the
signed contract in terms of numbers. Unreasonable quantity, quality,
type or set of documents not in accordance with the prescribed terms
and conditions.
Endorse B/E (ký hâ ̣u):
Endorsing a bill of exchange is a procedure for transferring ownership
of a bill of exchange from one beneficiary to another
The endorsing of the bill of exchange is done by the endorser signing
the transfer on the back of the bill of exchange and giving it to the
assignee (Endorsee).
Endorsements are indicated on the back of the bill of exchange in the
following forms of endorsement
-Blank endorsement
the endorser simply signs the back and does not designate a
beneficiary of the bill of exchange. With this endorsement, the
person holding the bill of exchange becomes the beneficiary of
the bill and the next transfer of the holder does not need to
endorse, just handing is enough.
-To order endorsement
the endorser presumptively appoints the beneficiary of the bill
The endorser only writes "Pay to order of Mr (Mrs) X" and signs
it. Thus, the beneficiary of the bill of exchange in this case has
not been clearly specified. It is necessary to speculate on the will
of Mr. X. the beneficiary of the bill of exchange, if Mr (Mrs) X is
silent, the beneficiary of the bill of exchange is of course Mr. X.
-Restrictive endorsement
is the endorsement of the name of the beneficiary of a bill of
exchange and only that person
-Without recourse endorsement
is the endorsement in which the endorser writes the sentence
"Exemption from recourse to the endorser" with one of the three
types of endorsements mentioned above. For example: “Paying
according to the order of Mr. (Ms.) X, free of recourse” and sign.
 For this type of endorser, once the bill of exchange is refused
payment, Mr(Ms) X is not entitled to recourse to his direct
endorser's money.
-Conditional endorsement
is the endorsement of the transfer of a bill of exchange to a person if that
person fulfills the provisions set forth by the endorser

So sánh clean collection và Documentary collection

So sánh D/P, D/A, Forward D/P:

Risks to exporters, importers, remitting bank, collecting bank in D/A,

D/P

Risks to the beneficiary, applicant, Issuing bank, negotiating bank and

confirming bank under L/C transaction

Contents of an L/C

Mandatory:
Credit number
Place of L/C issuance
L/C due date
Names and addresses of related parties
Optional:
Time of L/C issuance

Transferable and back to back credit

Concept between them:

Back-to-Back Letter of Credit acts as an alternative to Transferable Letter of

Credit. It provides the middlemen/first beneficiary/exporter the right to use the
original Letter of Credit as a security in favor of the supplier i.e. the secondary
beneficiary.

On the other hand, it also acts as a credit document but with a little difference.
Here the middlemen / first beneficiary/exporter request the buyer to issue a
Transferable Letter of Credit so that he can endorse it further to the supplier of the
material i.e. the secondary beneficiary. If the Letter of Credit is not transferable, it
cannot be handed over the supplier.