Terms of
payment used in international trade
Import financing
1. Advance Payment System
Before import we have to pay potion.
It goes from 0% to 100%.
Eg. Educational payments for foreign
country educational institutes
Import machines
2. Documentary Credit or Letter of Credit
Govern by UCP
Irrevocable undertaking (seller, buyer,
seller’s bank and buyer’s bank)
Related to a payment for a sale
Payments will be made If the documents in
compliance to the L/C or initial agreement
3. Documentary Collection
Govern by URC
Documentary against Acceptance (D/A)
Documentary against payments (D/P)
4. Open Account
Goods come to port, Documents go to customer,
after selling goods he/she credited agreed amount
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