Introduction to Finance

order bill of lading 
document 
given by a transportation company 
that lists goods to be transported 
and terms of the shipping 
agreement
PAY TO THE
DOLLARS
$
ORDER OF
VALUE RECEIVED AND CHARGE TO ACCOUNT OF
NEW ORLEANS EXPORT COMPANY
TO
No.
2,500.00
New Orleans, Louisiana, August 15, 20–
At sight - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Mervin J. Mansfield
Two thousand five hundred no/100 - - - - - - - - - - - - - - - - - 
Brazilian Import Company
11678 Rio de Janeiro, Brazil
FIGURE 6.3
Sight Draft or Bill 
of Exchange

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C H A PT E R 6 International Finance and Trade
to the merchandise being shipped, and only its holder may claim the merchandise from the 
transportation company. The documentary sight draft is generally referred to as a D/P draft 
(documentary payments draft), and the documentary time draft is referred to as a D/A draft 
(documentary acceptance draft).
A 
clean draft
 
is one that is not accompanied by any special documents and is generally 
used when the exporter has confi dence in the importer’s ability to meet the draft when presen-
ted. Once the merchandise is shipped to the importer, it is delivered by the transportation 
company, regardless of any actions by the importer in terms of the draft.
Bank Assistance in the Collection of Draft s 
An importer will generally try 
to avoid paying for a purchase before the goods are actually shipped, because several days 
or perhaps weeks may elapse before the goods arrive. But the exporter is often unwilling to 
send the draft and documents directly to the importer. Therefore, the exporter usually works 
through a commercial bank.