3/25/2020 To… Name of company (sign) … ( the opening bank/confirming bank, paying bank)… Drawn under…… :….(the issuing bank) …………… .……… Irrevocable L/C No: …(the number of L/C)… dated :…(issuing date)……… Value received as per our invoice (s) No (s) : …(the number of invoice)……… Dated ……… :….(date of invoice) …………………………………….… 10 At… …(maturity date)… Sight of This First Bills of Exchange (Second of the same tenor and date being unpaid) pay to the order of….(exporter bank, advising bank, remitting bank)………………………… The sum of … … (currency in full name, amount of money in words ……………… Place… (Place where B/E drawn)… Date:… (Date when B/E drawn) For… …(amount of money in figures, name of currency)………… No… (number of B/E) … BILL OF EXCHANGE 3/25/2020 - This is based on the same, rather antiquated logic, of having two or three bills of lading designed to ensure that at least one arrives successfully at destination - It is common for two, or even three, bills to be drawn up Why does a bill should contain the words ‘first of exchange second unpaid’? 11 3/25/2020 A termed bill (usance bill): - accepted by the drawee - not a guarantee of payment on maturity -The exporter has agreed to allow a credit period, for example 90 days - The buyer has a period of use of the goods before having to pay -The credit term allowed in the bill can run from the date of shipment (as evidenced by the transport document), the date of the bill or even the date of invoice -Possible to arrange for the accepted bill to be avalised by the buyer’s bank -In L/C the bank will accept the ‘termed draft’ 12 - is payable when the holder presents it for payment or at a stated time after presentment - In L/C, assuming that no documentary discrepancies are found, the bank will pay against the ‘sight draft’ A sight bill: ( demand bill) A clean bill: no accompanying documents, & while it is a valid means by which one party can claim payment from another  3/25/2020 A documentary bill: accompanied by the shipping documents relating to the goods for which payment is sought  Types of Bill of exchange based on the documents accompanied 13  3/25/2020 Bill of exchange in L/C method: often drawn on the issuing/confirming bank; the drawee on such bills will be a bank rather than the buyer; reflect whether the L/C is payable at ‘sight’ or contains an credit term which requires a 90day bill drawn on the issuing bank In both cases, the bill will contain a clause referring to the relevant letter of credit  Bill of exchange in Collection method: drawn on the buyer; the drawee on such bills will be a buyer; 14 Types of Bill of exchange based on the method of payment 3/25/2020 15 Ha ., (7) (Signed) (6) 3/25/2020 Import-export Co.(8) To…(3)… Date/wired 16 Drawn under…………………………………………………………… The sum of (2)…………………………… At …(4)… sight of this FIRST of exchange (Second of the same tenor and date being unpaid) (2) Pay to ……(5)… For: (2)………… No: 01/XK Bill of Exchange (1) CONTENT OF B/E 3/25/2020 1/ B/E title 2/ An unconditional order to pay a determine sum of money 3/ Name, address of the Drawee 4/ Time of payment 5/ Beneficiary 6/ Place of payment 7/ Place and date of issue 8/ Name, address of Drawer and signature of the legal representative of the Drawer CONTENTS OF BILL OF EXCHANGE 17  3/25/2020 In the same language as B/E content 1/ B/E title 18  3/25/2020 Pay to  Drawer: issues without condition  Drawee: pay upon demand without condition  Amount must be a specific number, in figures and/ or in words  In case of difference between figure and word amount, what is solution? 2/ 19 3/25/2020 1/ Who is Drawer? Drawee? Beneficiary? 2/ When does the Drawee pay for the Bill of exchange? 3/ Which method of payment this B/E is used? ANSWER THE QUESTIONS 36  3/25/2020 Export: Minh Quan Company, HCM City, VN  Import: Golden Beauty Cor, Singapore  Payment: by L/C at sight  Issuing Bank: ANZ Bank, Singapore Branch  Advising Bank: Sacombank GoVap Branch  Shipment date: 20/02/2015  Unit price: 34.16 USD  Quantity: 3285 sets  L/C No 112233 dated 10/02/2015 ISSUE BILL OF EXCHANGE (1) 37         3/25/2020 Buyer: YAGI Co Ltd, 112 Machikou, Osaka, Japan Seller: HUU NGHI GARMENT IM - EX Co., 636 Nguyen Huu Cau, Dist.8, HCMC, Viet nam Contract No 345HN dated 14/04/2015 Amount: USD 43,514.32 B/L date: 25/04/2015 Payment: D/A 45 days after signed B/E Remitting Bank: ACB Binh Dong Branch Collecting Bank: Korea Exchange Bank ISSUE BILL OF EXCHANGE (2) 38  On November 28, 2013, Cholimex Company signed the contract No 022 / 2013HDXK, export frozen shrimp to Japan $ 92,857, payment by credit letter deferred payment 90 days from the date of receipt of draft  On 03/01/2014, Cholimex delivered commodities according to L/C No 021435  LC issued by Bank of Tokyo-Mitsubishi on 10/12/2013  Please issue a draft based on the above information Imported company is Morikara in Osaka L / C advising bank is Vietcombank Binh Tay branch 3/25/2020 39 ISSUE BILL OF EXCHANGE (3)   3/25/2020 40 Singsong Company, Singapore has exported 1800 electric fans to Mai Le in Ho Chi Minh City under contract No 34SL signed on 30/01/2016 at the unit price of 43.25 SGD CIF Incoterms 2010, payment by D/P On 14/03/2016 the Singsong Company delivered and signed Commercial invoice number SS312 Singsong has a bank account at National Bank, Mai Le has a bank account at Sacombank ISSUE BILL OF EXCHANGE (4) 3/25/2020 41 BILL OF EXCHANGE (1) No: 123 HCM city, Feb 2nd 2016 For: USD 32,493 At sight of first Bill of Exchange (second of the same tenor and date being unpaid) Pay to the order of VCB Tan Dinh Branch the sum of US Dollars thirty two thousand four hundred and ninety three only Drawn under L/C number 3456 dated 25/01/2016 Issued by Shihuyp Bank To Thinh An Im-Ex Company Mok Hea Company Director Korea (signature) TRUE OR FALSE? 3/25/2020 42 No: 123 2016 For: USD 32,493 At sight of second Bill of Exchange (first of the same tenor and date being unpaid) Pay to Thinh An ImEx Company the sum of US Dollars thirty two thousand four hundred and ninety three only Drawn under L/C number 3456 dated 25/01/2016 Issued by Shihuyp Bank , Seoul Branch To Thinh An Im-Ex Company Shihuyp Bank, Seoul Branch Director Korea (signature) BILL OF EXCHANGE (2) HCM city, Feb 2nd TRUE OR FALSE? 3/25/2020 Issue a bill of exchange with the following information:  Drawer: CHUYEN GIA CO.LTD, Ho Chi Minh City, Viet Nam  Drawee: NIHON BENGKIO, Surabaya, Indonesia  Amount: 30,000 USD  Method of payment: D/A  Remitting bank: DONG A bank, Viet Nam  Collecting Bank: CITI, Indonesia  L/C issuing bank: SACOMBANK, Viet Nam  Date of shipment: 20 August, 20xx  Invoice number: NT12-NT403DV01 43 3/25/2020 Issue a bill of exchange with the following information:  Drawer: CHUYEN GIA CO.LTD, Ho Chi Minh City, Viet Nam  Drawee: TATAMULYA INDUSTRI, Tokyo, Japan  Amount: 60,000 USD  Method of payment: L/C at sight  Advising bank: DONG A bank, Viet Nam  L/C issuing bank: OSAKATACHI bank, Tokyo, Japan  Date of shipment: 20 th August, 20xx  Invoice number: NT12-NT403DV01  L/C No:CG123  Issuing date of L/C: 20 th June 20xx 44 Base on the following information, and selfmade information (if necessary), please issue a draft to demand payment  “On 1st Mar 2016, Hoa Vuong signed a contrat No.08/16 to export coffee worth 100,000USD The importer is R&R company, located at 12 Greenfield Str, NSW2200, Australia The contract is paid by documentary collection D/A (30 days after acceptance) through Asia Commercial Bank Delivery date on 10 Apr, 2016 at Cat Lai port.”  BILL OF EXCHANGE ……… Date …./…./… 3/25/2020 At … … sight of this FIRST Bill of Exchange (SECOND the same tenor and date being unpaid) pay to the order of ……………………………………… the sum of ………………………………………… Drawn under ……………………… dated ./… /…… To: …………… ……………… No…………… For: ……… 46 Exercise 1: On 28 Nov 20xx Amex Co signed a contract No 01/12XK to export frozen shrimps to Japan with the value of 100,000 USD The contract is paid by Letter of Credit deferred 90 days Shipment is made at SaiGon Port on 02 Jan 2007 under the L/C No 093432/LC issued by Bank of Tokyo – Mitsubishi dated 10 Dec 2006 Basing on the given or self-made (if necessary) information and the draft sample below, please issue a draft to demand payment from the importer 3/25/2020 47 Drawn under L/C No 093432/LC dated 10 Dec 2006 issued by BANK OF TOKYO MITSUBISHI To: BANK OF TOKYO MITSUBISHI Amex company TOKYO, JAPAN HCMC At …90 days… sight of this FIRST Bill of Exchange (SECOND the same tenor and date being unpaid) pay to the order of ASIA COMMERCIAL BANK the sum of US DOLLARS ONE THOUSAND ONLY No: 01/12XK BILL OF EXCHANGE For: USD 100,000.00 Ho Chi Minh, 02nd Feb 20xx Draft of exercise 1: 3/25/2020 48 Exercise 2: Savimex company has completed delivery of export conignment valued 48,285 USD under the sight contract number 21/2006XK signed on 02 Sep 20xx to the importer - Tran Co based at 26 Greenfield street, Bankstown NSW 2200, Australia Place of delivery is Sai Gon Port and payment is made through Asia Commercial Bank Basing on the given or selfmade (if necessary) information and the draft sample below, please issue a draft to demand payment from the importer To: Tran Co 26 Greenfield street, Bankstown NSW 2200, Australia 3/25/2020 Savimex Co., HCMC Drawn under Contract No 21/2006XK dated 02nd Sep 20xx At …xxx … sight of this FIRST Bill of Exchange (SECOND the same tenor and date being unpaid) pay to the order of ASIA COMMERCIAL BANK the sum of US DOLLARS FOURTY EIGHT THOUSAND TWO HUNDRED EIGHTY FIVE ONLY No: 23/2006 BILL OF EXCHANGE For: USD 48,285.00 Ho Chi Minh, 02nd Oct 20xx Draft of exercise 2: 49  3/25/2020 50 Cheque is an unconditional order in writing drawn and signed by a person for the benefit of another to direct a bank to pay a fixed sum to a named recipient or bearer of the cheque CHEQUE ... to Thinh An ImEx Company the sum of US Dollars thirty two thousand four hundred and ninety three only Drawn under L/C number 3456 dated 25/01/2016 Issued by Shihuyp Bank , Seoul Branch To Thinh... Dinh Branch the sum of US Dollars thirty two thousand four hundred and ninety three only Drawn under L/C number 3456 dated 25/01/2016 Issued by Shihuyp Bank To Thinh An Im-Ex Company Mok Hea Company... time limit at B/E must be presented for asking payment  + Under ULB 1930: within 01 years  + Under Vietnam's law: within 90 days 7/ Place and date of issue 24 3/25/2020 25  3/25/2020 Value received