BANK PAYMENT OBLIGATION CASE

Senseware is a South Korean company that exports efficient energetic

systems for homes all over the world. To manufacture them, they import
components from Hong Kong, to the company Mobicon Holding Ltd.

The operation is worth USD 250,000 and the method of payment agreed is
the Bank Payment Obligation (BPO) because there is no confidence
between parties. The importer’s bank is Citigroup Korea and the
beneficiary is Bank of East Asia.

Task 1
Order the following phases:

Phase Order
Citigroup Korea sends USD 250,000 to the Bank 10
of East Asia to be transferred to Mobicon Ltd.

Senseware sends the following information to his 2

bank, Citigroup Korea:

- Operation according to proforma invoice

INV123456
- INCOTERM: CIF (Port of Busan, South
Korea) INCOTERMS ICC 2020
- Transport: MARITIME
- Insurance: ICC A.
- REQUEST COMMERCIAL INVOICE,
PACKING LIST, B/L, CERTIFICATE OF
ORIGIN AND SGS QUALITY CERTIFICATE
- Units: 50,000
- Value: USD 250,000
- Latest date of shipment: 05/12/2021
- Exporter: Mobicon Holding Ltd
- Exporter’s bank: Bank of East Asia
Citigroup Korea introduces all the importer’s data 3
to the TMA (Transaction Matching Application)
and issues the BPO, informing the Bank of East
Asia.

The Bank of East Asia informs its client (Mobicon

Holding Ltd) that there is a BPO for them. After
that, the exporter sends the following data to his
bank:

- Operation according to proforma invoice

CINV123456
- INCOTERM: CIF (Port of Busan, South
Korea) INCOTERMS ICC 2020
- Transport: MARITIME
- Insurance: ICC A
- REQUESTED DOCUMENTS:
COMMERCIAL INVOICE, PACKING LIST,
CERTIFICATE OF ORIGIN, B/L AND SGS
QUALITY CERTIFICATE
- Units: 50,000
- Value: USD 250,000
- Latest date of shipment: 05/12/2021
- Exporter: Mobicon Holding Ltd
- Exporter’s bank: Bank of East Asia

The exporter sends the merchandise. 5

Now the TMA accepts the operation. 4

8
Once the exporter knows that he will collect the
operation for sure, he sends the original
documents directly to the importer (Senseware)

The exporter’s bank introduces the documents in 7

the TMA.

If the documents are correct, the exporter will

have the right to an irrevocable payment.

6
Once the merchandise is shipped, the exporter
sends all the documents to his bank
(COMMERCIAL INVOICE, PACKING LIST,
CERTIFICATE OF ORIGIN, B/L AND SGS
QUALITY CERTIFICATE)

The importer gets all the documents and receives 9

the merchandise

1
Senseware and Mobicon sign the contract worth
USD 250,000