Chapter 3:

Financial documents in
the international
payment
Outline

I. Bill of Exchange

II. Promissory notes

III. Cheque

IV. Bank account

I. Bill of Exchange

1. Law governing bills of exchange

Bill of Exchange Act of 1882 (BEA) - Luật hối phiếu Anh

Uniform Commercial Code 1962 (UCC) - Luật thương mại

thống nhất của Mỹ

Uniform Law for Bills of Exchange; Geneve Convention

1930, ULB 1930 - Công ước Geneve 1930 về Luật hối phiếu
thống nhất

Law on negotiable instruments 2006 - Luật các công cụ

chuyển nhượng tại Việt Nam
 I. Bill of Exchange

‘A bill of exchange is defined as an instrument in writing

containing an unconditional order, signed by the maker, directing
a certain person to pay a certain sum of money only to, or to the
order of a certain person or to the bearer of the instrument” (Bill
of Exchange Acts, 1882).

Hối phiếu là một tờ mệnh lệnh đòi tiền vô điều kiện do một người ký phát
cho người khác, yêu cầu người này khi đến một thời hạn nhất định hoặc
một thời hạn có thể xác định trong tương lai phải trả một số tiền nhất định
cho một người nào đó, hoặc theo lệnh của người này trả cho người khác,
hoặc trả cho người cầm hối phiếu.
 I. Bill of Exchange

Drawee Drawer

This party requires the

This party pays the
amount stated on the bill
of exchange to the payee
Stakeholder
drawee to pay a third party
(or the drawer can be paid by
the drawee).

Beneficiary This party is paid the amount

/Payee specified on the bill of
exchange by the drawee.
I. Bill of Exchange
 I. Bill of Exchange
3. Form of bill of exchange
A bill of exchange must be a document. According to the laws of
the general countries, bills of exchange can be handwritten,
typed, printed ... that have equal value.

It is forbidden to write on a bill of exchange with a pencil, easy

to fade, red ink.

The language must be consistent, may be made in one or more

originals to prevent loss or damage, usually two (2) originals,
each with an ordinal number and equal value.
The Bill of exchange does not have originals or copies.
I. Bill of Exchange
4. Contents of Bill of Exchange
I. Bill of Exchange
1. Title of the bill of exchange: the word
"Bill of Exchange" must be written
(Exchange or Draft)
Ex: If the title is written in English, all
contents of the draft must be in English.

2. Amount and currency: This certain

amount must be clear, simple, following
international practice, recorded both in
numbers and in words
Note: The amount must not exceed the
amount on the invoice/ contract.
 I. Bill of Exchange

3. Drawee/Payer
The full name and address of the Drawee must be detailed
clearly
In the collection payment method: the payer is the importer
In the document credit payment method: the payer is the bank
who opens the L/C.
 I. Bill of Exchange

4. Payment period: having 02 types:

- Pay immediately: at Sight of this FIRST (SECOND) Bill of Exchange - “trả
ngay khi nhìn thấy bản thứ nhất (hai) của hối phiếu này”.
- Pay later: there are many ways to negotiate:
+ At ... X days .... after sight of this .......... (Thanh toán tại 1 ngày
nhất định sau khi nhìn thấy hối phiếu)
+ At .... X days ... after signed of this ....... (Thanh toán tại 1 ngày
nhất định sau ngày ký phát hối phiếu)
+ At.....X days....after bill of lading date of this..... (Thanh toán tại 1
ngày nhất định sau ngày ký vận đơn)
+ At.....X days.....after shipment date of this....... (Thanh toán tại 1
ngày nhất định sau ngày giao hàng)
+ On......(date).....of this..... (Thanh toán tại 1 ngày cụ thể trong
I. Bill of Exchange

5. Place of payment
The address of drawee (payer) is the
place where the draft is paid.

6. Beneficiary/Payee of Draft:

The beneficiary can be a Drawer or another person appointed by the

drawer.
In foreign trade (Ex: L/C), bills of exchange are usually drawn to the
beneficiary for the bank that is serving the exporter.
 I. Bill of Exchange
7. Place and date of writing Draft:
- Place: in the country where the draft
is issued (exporter).
- Date: must not be earlier than the
date of the invoice, not earlier than the
date of opening the L/C and within the
effective period of the L/C.

8. Drawer
The name, address and signature of the drawer are required to be shown.
The signature of the drawer must be the signature of a person with full
legal capacity.
Signatures with print, photocopy, and stamp styles ...which are not
handwritten will not legally valid.
I. Bill of Exchange
A draft in the collection method
I. Bill of Exchange

Bill of exchange in the documentary credit (L/C)

method
 I. Bill of Exchange

Characteristics of bills of exchange:

- The abstraction of bills of exchange: it is not necessary to specify
the content of economic relations.
- Mandatory payment of a bill of exchange: Payer must pay
according to the requirements of the bill of exchange. The drawer
is liable to pay the beneficiary unconditionally if the bill of
exchange has been transferred without being paid.
- Circulation of the bill of exchange: Bill of exchange can be
transferred from one person to another during its term, or it can be
used as a pledge, a mortgage to borrow money at commercial
banks or discounted at commercial banks, ... in period
 I. Bill of Exchange
Classification of bills of exchange:

a / Based on the payment term

- At sight Bill: a bill of exchange that requires the drawee has to pay for the holder as
soon as when seeing it.

- Usance Bill: The drawer can set the term of the bill of exchange in the following
ways: paying after a certain period from the date of signing, or paying after 1 certain
period from the date of delivery, or paid at a specific date in the future, ....

b / Based on the attached documents

- Clean Bill of Exchange (Hối phiếu trơn): the payment does not attach commercial
documents (documents of goods).

- Documentary Bill of Exchange (Hối phiếu kèm chứng từ): is a draft attached to
commercial documents. The payer must pay the bill of exchange or sign the bill of
exchange before receiving the commercial documents.
I. Bill of Exchange
Acceptance bill of exchange

Endorsement bill of exchange

Blank endorsement or “Pay to bearer”
To order endorsement: "Pay to the order of ABC"
Restrictive endorsement: "Pay to Mr.A/ABC only"
Recourse/ Without recourse endorsement
Conditional endorsement
Protest bill of exchange
Discount bill of exchange
 II. Promissory notes
A promissory note is a financial instrument that contains a
written promise by one party (the note's issuer or maker) to
pay another party (the note's payee) a definite sum of money,
either on-demand or at a specified future date.

Lệnh phiếu là chứng chỉ có giá do người mua chịu lập, là

một giấy hẹn trả tiền, cam kết trả một số tiền xác định
trong một thời gian và ở một địa điểm nhất định cho
người thụ hưởng.
II. Promissory notes
II. Promissory notes
II. Promissory notes
1. Title of Promissory note

2. Number of Promissory note

3. Amount of money, and currency

4. Location of writing, and date

5. Date of promising to pay

6. Beneficiary/Payee
7. Amount in words

8. Drawee/buyer
II. Promissory notes
1. Title of Promissory note

2. Number of Promissory note

3. Amount of money, and currency

4. Location of writing, and date

5. Date of promising to pay

6. Beneficiary/Payee
7. Amount in words

8. Drawee/buyer
II. Promissory notes
 II. Promissory notes

Draft Promissory Notes

Kind Order Promise to pay
Duration Pay immediately Have exactly date
or pay later

Signature Drawer/Seller Drawee/Buyer

Number of > = 02 01
originals
III. Cheque
1. Law governing cheque

Uniform Law on Cheque – ULC 1931 – Luật thống nhất về séc
 III. Cheque
2. Definition
Cheque refers to a negotiable instrument that contains an
unconditional order to the bank to pay a certain sum mentioned in the
instrument, from the drawer’s account, to the person to whom it is
issued, or to the order of the specified person or the bearer.

Séc là một tờ mệnh lệnh vô điều kiện do một người (chủ tài khoản tiền gửi),
ra lệnh cho ngân hàng trích từ tài khoản của mình một số tiền nhất định để trả
cho người được chỉ định trên séc, hoặc trả theo lệnh của người này hoặc trả
cho người cầm séc
III. Cheque

Drawee Drawer

Stakeholder

Beneficiary
/Payee
III. Cheque
III. Cheque
 III. Cheque
Term of Cheque
The cheque is only valid if its validity period remains.

The validity period of a Cheque is calculated from the date of

issuing.

The duration of a Cheque depends on the extent of the space

that the circulation checks and the laws of the countries. In
general, checks circulating domestically are shorter than
checks circulating on international payments.
 III. Cheque
Kinds of Cheque

Séc đích danh (nominal cheque)

Séc vô danh (Bearer cheque)

Séc gạch chéo (crossed check)

Séc theo lệnh (Order cheque)

Séc du lịch (traveller’s cheque)

Thank You