Negotiation means the standard procedures that bank performs which includes checking of the documents and giving value to the seller. The issuing bank may issue the LC available by negotiation with a nominated bank or it may allow the LC to be freely negotiated with any bank. In the first case, the beneficiary, that is the seller, has to present the documents only to that bank, which is the nominated bank. Nevertheless, the nominated bank is not bound to negotiate if it has not undertaken a separate payment obligation to the seller.

The nominated bank may simply refuse to negotiate the documents drawn under the LC. This is because, by having been nominated by the issuing bank, it does not constitute and undertaking to negotiate. If, however, the nominated bank has added its confirmation to the LC at the request of the issuing bank, thereby undertaking a separate payment obligation to the seller, then it has to honour its undertaking and pay for the documents drawn under the LC if they are in order.

LC which does not nominate any bank is normally available for negotiation with any bank in the country of the seller which is willing to negotiate the documents. There are 4 types of negotiation practiced by banks around the world. They are:

1. Negotiation without recourse
2. Negotiation with recourse
3. Negotiation against indemnity
4. Negotiation under reserve

A seller may present his documents drawn under LC directly to either:

a) The issuing Bank (bank that issues the LC) or
b) The confirming bank (bank that adds its confirmation at the request of the issuing bank) or
c) To his own bank.

If the seller chooses to present the documents directly either to the ISSUING BANK or to the CONFIRMING BANK, these banks make payment WITHOUT RECOURSE to him. Meaning, the payment that has been paid to the seller shall not in any way become claimable by these banks in the event the documents are found not in order after making such payment.

These banks cannot have recourse to the seller because by issuing or confirming the LC, they have taken upon themselves the risk that the party from whom reimbursement is to be obtained may become insolvent.



Article Source: http://EzineArticles.com/?expert=Wan_Nawawi_Hassan

Once touted as the next economic super power in Asia, Philippines has experienced both turbulent times and occasional phases of economic prosperity. Today, the Philippine economy is taking initiatives to march ahead of its economically superior neighbours-Malaysia, Hong Kong and Indonesia.

Making Giant Strides

The efforts have fetched it global recognition from the International Monetary Fund (IMF) which ranked it the 37th largest economy in the world in 2007. In view of these developments, India has realised the potential of the Philippine market that offers diverse areas of mutual cooperation between the two countries.

India is an important trading partner of Philippines. It is a major exporter of products such as rice, wheat, meat & meat products, drugs, pharmaceuticals & fine chemicals and transport equipments to Philippines. The products imported by India from Philippines include electronic goods, inorganic chemicals, newsprint, electrical machinery and transport equipments.

According to the Federation of Indian Chambers of Commerce and Industry (FICCI), there is immense scope for beneficial trade relations between India and Philippines. The organisation believes that the bilateral trade can increase to US$ 2 billion by 2010, provided both countries work on their trade relations.

Improved trade relations would especially benefit the small and medium enterprises in the two countries. Areas where Indian firms can invest in Philippines include industries like textile machinery, drugs & pharmaceuticals, software development & training, steel & metal, engineering consultancy and transport equipment.

Fostering Relations

To boost the Indo-Philippine trade relations, governments of both countries have set up institutional mechanisms that convene regularly. A Joint Working Group has been established to facilitate interactions between the businesses and governments of the two countries on issues of mutual interest. In addition, the India-Philippine Joint Council arranges conferences between the private businesses of India and Philippines.

In spite of the various initiatives taken by both sides, industry experts from both countries feel that the potential of bilateral trade is yet to be explored completely. Analysts point out that while Indian investment in the Philippines is restricted to the fields of textiles and chemicals, Philippine investment in India is concentrated in select sectors like telecom and human resource development (HRD).

In future, investments in other areas such as information technology (IT), health care and energy are expected to boost the economies of the two countries. The Indian SMEs should therefore explore the numerous business opportunities that can be tapped effectively in future. Small scale units (SSUs) of both countries can cooperate with each other through joint ventures, partnerships and mergers.

The two governments should implement treaties and agreements to lend support to the business houses. Areas that call for immediate attention are the issues concerning restricted trade and investment relations. By focusing on these critical areas, India and Philippines can forge better trade relations in the future.



Article Source: http://EzineArticles.com/?expert=David_K_Parks

You may be able to find a new business opportunity or profit growth by directly importing products from China, and other countries. Some say it is can be complicated. I do not feel this way, and it can pay off in both immediate profit and long-term success. The process is becoming easier and easier thanks to the trend of globalization and advances in international trade technology.

Find several products you're interested in. There are many sources to find your products. The Internet is the easiest one to start with. There are many web listing services, At these sites you can register your user name, post the products of your interest, and you will receive tons of products' supply information and perhaps a price list.

Next, establish a relationship with potential suppliers. Pick a few potential suppliers to communicate with. Narrow down the ones that you really want to work with. Talk openly and honestly about the price and trade relationship. Many times the prospective supplier will send samples Free of shipping fees. Discuss shipping and payment terms. Gather all necessary information to prepare for placing a trial order. Remember everything is negotiable.

You will help yourself greatly by knowing and understanding the trade terms and use them. Before placing any order, you need to understand and confirm with your suppliers about shipment terms. Most popular are FOB (freight on board) and CIF, (cost insurance and freight), as well as payment terms. These are closely related to your landing cost calculation and risk assessment. You can consult an import management company and a freight forwarder for detail break-down on the costs and risks. You can also use an import management company to negotiate the trade terms. I prefer to do the negotiations my self. I love working with people.

Do your homework on compliance issues and always remember you have the option of talking to a customs professional. They get paid to know the laws and are bonded in most cases. You need to understand the relevant import compliance regulations beforehand. Besides US Customs and Border Protection, other government authorities like USDA, FDA, DOT, and ATF also regulate the importation. Go to the websites of these agencies to understand, register or download the forms. Compliance issues can be very complicated for some products. It is highly recommended to consult a good Customs House Broker before placing any order. Customs brokers are going to charge a fee for their services. So do not be afraid to let them do the work and make sure everything is legal.

Select a forwarder and Customs House broker. Go to your local international trade organization/association and Customs office to find the list. Visit them, and select the one you like. For the first time importer, use more individualized services, because you need more attention than you would expect.

There are people who will tell you how hard it is to import and/or export goods. You need their expertise and services. For which they only charge a most fee. Please trust me as I share with you. I was not then, nor am I now a professional importer.. Anyone can do it. Thank you for your time and interest in this brief article.



Article Source: http://EzineArticles.com/?expert=Walter_Scheu