International Payment

Why DC?

• Easier to use and lower bank fee
• collection procedure entails risk
• Conditions to use DC
• No doubt on buyer’s integrity
• buyer’s country is stable and safe
• No foreign exchange control
• goods are marketable (exporter resell goods)

DC Procedure

• Exporter ships the goods
• exporter forwards the documents to seller bank (remitting bank),which in turns gives the document to the buyer’s bank (collecting bank)
• Collecting bank informs the importer the conditions of the document or contract

Export Incentive Programs

• Export-Import Bank of the U.S. (Exim-Bank)
• set up in 1934
• to facilitate finance and export of American goods and services and maintain American companies in oversea market
• offers programs like guarantees, bank insurance and export credit insurance
• Foreign Export Credit Insurance
• provide insurance to exporters (nonpayment and preshippment risk
• Small Business Administration (SBA)
• provide business loans and financing for small companies

Export Incentive Programs

• Commodity Credit Corporation (CCC)
• provide assistance in production/marketing of US agricultural products overseas
• Overseas Private Investment Corporation(OPIC)
• formed in 1971
• insuring direct US investments in foreign countries
• provide medium and long-term financing
• Private Export Funding Corporation (PEFCO)
• consortium of commercial banks and industrial companies
• provides medium to long-term financing to foreign buyers
• United States Export Assistance Center (USEAC)