Documents necessary in international business are the

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Documents necessary in international business are the official forms and other paperwork required in export transactions for shipping and customs procedures. Because ocean transport is most common a bill of lading is required. This is a basic contract between exporter and shipper authorizing shipping company to transport goods to buyer’s destination and serves as the importer’s receipt and proof of title for purchase of the goods. A certificate of origin is the birth certificate of the goods being shipped and indicates the country of origin. Exporters must provide a full description of the products being shipped. Governments use this information to find out the content of shipments to control exports and compile statistics on goods entering and leaving a country. Exporters typically purchase an insurance certificate to protect the exported goods against damage, loss, theft or delay. 2) If you were exporting products, why would you want the importer to have its bank open a letter of credit? Discuss the difference between revocable and irrevocable letter of credit. A letter of credit is a contract between the banks of a buyer and the sell that ensures payment from the buyer to the seller upon receipt of an export shipment. This document protects the interest of both the seller and buyer. The system works because virtually all banks have established relationships with correspondent banks around the world. An irrevocable letter of credit cannot be canceled without agreement by both the buyer and seller. The selling firm pays as long as it fulfills its part of the agreement. The letter of credit immediately establishes trust between buyer and seller and specifies the documents the exporter is required to present. A revocable letter of credit can be changed or cancelled by the bank at any time for any reason. 3) Assume that you have developed a great market for your products in Eastern Europe, but you are having a hard time collecting hard currency. What options are open to you to convert local cash into hard currency? If I had a hard time collecting currency the options to convert local cash into hard currency include cash advances, draft or open account. Cash advance is when the exporter receives cash in advance, payment is collected before goods are shipped. Access to funds is almost 7
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HOMEWORK ASSIGNMENT 1: CHAPTER 1-7, 15 immediately upon concluding a sale. A draft is similar to a check where a bank pays a precise amount of a specific currency at a future date. Open credit is when the exporter uses an open account and buyer pays exporter at some future time following receipt of goods. This is generally used with customers of long standing or excellent credit. 4) In a short essay, discuss the role of customs agencies and the procedure of clearing goods through customs. Customs and boarder protection are put in place to regulate goods entering and leaving a country.
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