MODULE OUTLINE

Nguyen Thi Dieu Chi.PhD – Course of International Payments

Chapter 1. International trade and key issues of

international payments
Chapter 2. International sales contracts
Chapter 3. Guide to Incoterms
INTERNATIONAL PAYMENTS Chapter 4. Documents in international payments
Chapter 5. Terms of international payments
Chapter 6. Payment instruments
Chapter 7. Methods in international payments
Chapter 8. Trade risks in international payments

School of Banking and Finance

Nguyen Thi Dieu Chi (PhD) 2

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REFERENCES REFERENCES
Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

1. Edward G Hinkelman, A short course in international Edward G Hinkelman,

payments, 2nd Edition, World Trade Press A short course in international payments, 2nd Edition, World
2. Tarsem Singh Bhogal & Arun Kumar Trivedi (2008) Trade Press
International Trade Finance: A pragmatic approach Tarsem Singh Bhogal & Arun Kumar Trivedi (2008)
Palgrave Macmillan International Trade Finance: A pragmatic approach
3. International trade laws and codes in international Palgrave Macmillan
payments UCP, ISBP, INCOTERMS, URC, URR…
4. Banking and Finance Magazines
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ASSESSMENT EXAMS
Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

 10% attendance (attend class, contribute for lessons…)
 20% mid term exams (2 exams)
 20% team project (Maybe replace by exams)
There will be three (3) tests during the semester. Two midterm tests
and one final test.
No makeup exams will be given, If you have to miss an exams, the
instructor must be notified before the exams

 50% final exams The exams are closed book and closed note. You may bring your
calculator(s). Any other electronic devises (e.g.cell phones, PDAs,
MP3 players, and laptop computers) are not allowed during the
exams.

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 TEAM PROJECT TEAM PROJECT
Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

The purpose of this project is to stimulate students Deadlines:

participating in lessons relating international payments, therefore  Soft copies should be sent to my email at
each team must read lessons basing on module outline at home and
ndchi226@gmail.com before the day of presentation
present them in front of the class.
 Hard copies will be submitted on the day of
Your mid term report should include (at least):
1. Present basic issues of the chapter which will be introduced in presentation
that day.
2. Applying and connecting lesson's issues with a bank or an
enterprises in Vietnam or any foreign banks and foreign
enterpries are performing in Vietnam
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MAIN CONTENTS
Nguyen Thi Dieu Chi.PhD – Course of International Payments

1 Background of international trade

and international payments
Chapter 1 Introducing sides in international
2
INTERNATIONAL TRADE payments

AND KEY ISSUES 3 Key issues in international payments

IN INTERNATIONAL PAYMENTS
4 International trade laws and codes
in international payments
School of Banking and Finance
Nguyen Thi Dieu Chi (PhD)

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Background of international trade Introducing sides in international payments

and international payments
Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

 Difference of geography condition, development standard, natural

Sides in
factors, production capacity of nations; international payments

 Goods are transported among countries by many different transport

means; Importer Exporter
 There are many risks in moving goods from countries to countries
 There are many issues in paying and receiving goods in
Commercial
international trade; Banks
 Difference in commercial habits of countries requires a general
code to solve international trade problems;

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 Introducing sides in international payments Key issues in international payments
Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

 Exporters want to be certain that they are paid when their goods 1 Who bears the credit risk
have been shipped or dispatches because the goods will be out of
their control;
2 Who finances the transaction ?
 Importers want to be certain that they receive goods that conform
to what has be ordered;
3 In What currency will payment be made ?
 Commercial banks play an important role in international trade.
Commercial banks act as intermediaries between importers and
exporters. 4 What are the political and legal risk ?
 Commercial banks have insight and wide practical experience in
foreign trade coupled with legal knowledge of provision in different 5 Who will bear transportation costs and risks ?
countries and banks offer various types of services to local and
international business communities. What are the costs of each method of financing and
6 payment

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Who bears the credit risk ? Who finance the transaction ?

Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

 BUYER/IMPORTER: Prefers that the seller bear the risk and  BUYER/IMPORTER: Needs funds for payment and during the

wants to make certain that he receives the goods once he has paid period before resale of goods, and prefers that the seller finance

 SELLER/EXPORTER: Prefers that the buyer bear the credit the transaction

risk and want to make certain he receives payment for goods  SELLER/EXPORTER: Needs funds for production and the

shipped period before payment is received, and prefers that the buyer
finance the transaction.

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Which currency will be paid ? What are the political and legal risks ?
Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

 BUYER/IMPORTER: Wants (typically) to make payment in  Legal risks can also affect international transactions

own currency or in a currency that is expected to decrease in  Lack of comprehensive knowledge of legal issues can precipitate

value between date of the contract and date of the payment. problems unimaginable.

 SELLER/EXPORTER: Wants (typically) to receive payment  BUYER/IMPORTER: Considers political risk to be minimal in

in own currency, a hard currency, or in a currency that is part because he lives with every day and understands it.

expected to increase in value between the date of the contract  SELLER/EXPORTER: May consider political and legal risks to

and date of the payment be significant, especially if the country appears to be unstable by
his own standards.

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 Who will bear transportation costs and risks? What are the costs of each method of
financing and payment ?
Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

 BUYER/IMPORTER: Wants (typically) the seller to bear the  Cost are directly related to the risks and the buyers, the
transportation and insurance costs and to have the goods delivered
sellers or the banks have to pay.
to a local, home – country delivery point where ownership is
 The costs of each method of financing and payment
assumed
depend on risks as well as transferring goods from the
 SELLER/EXPORTER: Wants (typically) the buyer to bear the
transportation and insurance costs and to deliver the goods and sellers to the buyers
transfer ownership at his own warehouse or at a local port.

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Roles of international payment activity Roles of international payment activity

Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

For the Economy For the Banks

 Speed up import and export of enterprises and the economy;  Enlarge business activities – new activity (international
 Impulse foreign investment (direct and indirect foreign trade financing) ;
 Attract new customers ;
investment);
 Increase income sources ;
 Enlarge tourism, international cooperation;
 Share and decrease risks ;
 Attract financial sources such as international financing funds,  Raise liquidity ;
overseas national currency exchange;  Enlarge international partners
 Increase international finance integrations;  Improve quality of human resource

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International trade laws and codes in International trade laws and codes in
international payments international payments
Nguyen Thi Dieu Chi.PhD – Course of International Payments Nguyen Thi Dieu Chi.PhD – Course of International Payments

* Customs and Practice in international payment

International customs and practice  Uniform Customs and Practice for Documentary Credit – UCP)
1  Uniform Rules for Collection - UCR
in international trade
 The Uniform Rules for Bank to Bank Reimbursement under
Documentary Credit - URR
 International Commercial Term - Incoterms
2 National laws * International laws and conventions
 United nations convention on contracts for the international sale
of goods – Wien Convention 1980
 Uniform Law for Bill of Exchange – ULB 1930
3 International laws and conventions  International Bill of Exchange and International Promissory Note –
UN convention 1980
 Geneve convention for Check 1931

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 Nguyen Thi Dieu Chi.PhD – Course of International Payments

Q&A

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