PRESENTATION ON INTERNATIONAL TRADE PAYMENT PROCESSES-OPEN ACCOUNT

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Presentation transcript:

PRESENTATION ON INTERNATIONAL TRADE PAYMENT PROCESSES-OPEN ACCOUNT

OUTLINE Introduction Post payment Documents required- post payment Advance Payment Documents required – Advance Reconciliation

INTRODUCTION INTERNATIONAL TRADE PRODUCTS Mandate Involved in facilitating payment for goods and/or services between importers and exporters through authenticated request from either an importer or a bank to facilitate such payments. Methods/ Modes of Payment Post payment Advance Payments

Post Payment Trade Definition Post payment aka Open account is an arrangement between the buyer and the Seller whereby the buyer will pay the Seller after the Buyer received the goods, e.g. 30 -, 60 -90, etc. days from shipment date depending on the agreement between the Importer and Exporter. When to use Open Account Trade: Strong & long outstanding relationship between buyer and seller Buyer must be financially sound Country risk of buyer’s country must be minimal Seller must be able to provide credit to the buyer

DOCUMENTS REQUIRED FOR PAYMENT Original commercial invoice duly stamped by MRA. Original Customs & Excise Declaration( form 12) duly stamped and authenticated by MRA. Original Bill of lading, RCN or Airway Bill duly stamped by MRA. Certificate of origin duly stamped by MRA. Authenticated letter of authority to debit customers account

Advance Payments AKA prepayment is an arrangement whereby the Buyer pays the Seller before the goods/services have been shipped/performed or before the goods have been manufactured. When to use Prepayment Trade: After acquiring full information of the seller and are assured that they are not fraudsters Seller requires some deposit before manufacture

DOCUMENTS REQUIRED FOR PAYMENT Proforma invoice or contract between seller and buyer Vat Free Has advance payment term Full address of the Seller and buyer Banking details of supplier Form E (Imports only). Authenticated letter of authority to debit an account

RECONCILIATION ON PREPAYMENT Submission of customs cleared documents (stamped by MRA) upon receipt and clearance of goods as per Exchange Control compliance requirements. Release Order Form 12 Commercial Invoice Transport Document Failure to reconcile after 90 days results in suspension of customer account on Prepayments.

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