INTERNATIONAL

PAYMENT
Purposes of Subject
- Provide the basic knowledge about the international
payment

- Some key options of the commercial contracts and the

international payment

- The important of the Exchange market

 Chapter 1:

Overall About The

International Payment
Outline

I. Definition

II. The role of the international payment

III. Policy Rules

IV. Risks of the international payments’ activities

I. Definition
Payment
When money is transferred from one party to another
due to any economic transaction.

Payments are of two type, when payment is made in the

same country it is called local payment.

On the other hand, when the payer and receiver are of

two different countries, it is called international payment.
I. Definition

Border
USA Tr
ad ng
i ng di Japan
Tra

Vietnam
Tradi
g ng
n
adi
Tr
EU China
 I. Definition

Country A Trading Country B

When the payment process happens between two countries it

is called international payment through the relationship
between the banks of those countries (due to having different
currencies).
In international payment, payment is made by the
government, or citizen or organization of one country to the
govt. or citizen or organization of another.
 II. The role of the international payment
1. Toward the Economies
- Contributing to improving the integration process and
globalization.
- Contributing to enhancing the speed of capital transactions in the
world.
- Serving the payment demands of the organizations, supporting
the payment process become fast, convenient, and safe.
- Improving the foreign investment, international services.
II. The role of the international payment

2. Toward the import and export dealers

- The solution for the exporter is that they will control the
goods through the control of the transport documents using
the payment methods of commercial banks.
- The solution for the importer is that they will control the
money through the processing of transport documents using
the payment methods of commercial banks.
 II. The role of the international payment
3. Toward the Commercial Banks
Country A Country B

Bank A Bank B

Buyer Seller

- Payment according to customer's request.

- Protecting the interests of customers in payment transactions.
- Counseling and guiding guests on technical measures of international payment
operations to limit risks and create trust in foreign transactions.
- Proactively and actively finance customers' export activities.
- International settlement is a profitable activity of the bank
 III. Legal Rules
The international payment use ?

Country A Country B

Bank A Bank B

Buyer Seller

You cannot use the laws of one country to impose them on another.
 III. Legal Rules

The laws are strictly enforceable, not

exclusive.

The optional legal documents only have

legal effect when the related parties refer.
 III. Legal Rules

The legal priority order in descending order

Laws and international conventions

National law sources

International practices
 III. Legal Rules
Laws and international
conventions
(Luật và các công ước
quốc tế)

United nations convention on contracts for the international sale of goods – Wien
Convention 1980 - Công ước Liên hợp quốc về Hợp đồng mua bán quốc tế
Uniform Law for Bill of Exchange – ULB 1930 - Công ước Geneve 1930 về Luật
thống nhất về hối phiếu

International Bill of Exchange and International Promissory Note – UN convention

1980 - Công ước Liên hợp quốc về hối phiếu và lệnh phiếu quốc tế

Sources of international law and conventions on transport and insurance – Nguồn

luật và công ước quốc tế trong vận tải và bảo hiểm
III. Legal Rules

National law sources

(Các nguồn luật quốc gia)

Civil legal
Commercial law
Foreign exchange business law
Foreign exchange management law
III. Legal Rules
Quy tắc thực hành thống nhất về tín dụng
chứng từ (Uniform Customs and Practice for
International Documentary Credit – UCP) – điều chỉnh
practices hoạt động thanh toán thư tín dụng.
(thông lệ và tập
Quy tắc thống nhất về nhờ thu (Uniform
quán quốc tế) Rules for Collection – URC) – điều chỉnh
hoạt động thanh toán nhờ thu.

Quy tắc thống nhất về hoàn trả tiền hàng (The
The international
Uniform Rules for Bank to Bank
practices are just Reimbursement under Documentary Credit -
optional legal URR).
documents
Điều kiện thương mại quốc tế (International
Commercial Term - Incoterms) - điều chỉnh các
hoạt động giao nhận hàng hóa quốc tế.
 III. Legal Rules
The international practices are just optional legal documents:

 They only come into force when there is a clear

applicable reference in the contract. At the same time,
once in the contract with applicable references, they
become compulsory legal documents.

 The contracting parties may exclude, supplement or

amend the provisions of international practice. In this
case, the other clear provisions of the contract will take
precedence over the legal aspects of international
practices.
 IV. Risks in International Payment

International payment risks are risks arising in the

process of making international payments related to
international transactions, caused by relationships
between parties to international payments such as: export,
import, banks, individuals and intermediaries ... or caused
by other objective factors such as natural disasters, war,
politics, ...
IV. Risks in International Payment

Seller Buyer

Banks
IV. Risks in International Payment

Kinds of Risks

Trade risks Risk in payment

IV. Risks in International Payment

Trade risks

Buyer
Seller

Banks
 IV. Risks in International Payment

Risk in
payment
Foreign
Credit risk exchange
risk

Moral risk Legal risk

National
risk
Thank You