with i, but if you have learners who work in the they can help explain things.
excellent source of information on trade finance the time of writing] is the Aled Bank of Ireland
Finance Services’ website, at http://www.
adefinance.com. Thisincludes diagrams explaining of credit and bills of exchange, and a full
ry. Tis sites the inspiration behind the trade - report in Unit 14.
unit concentrates onthe two most common ways ncing foreign trade: letters of credit and ills of nge. Both ofthese are definedin the Student's hich also gives a complete account of the
stages involved in paying fora transaction by jf letter of credit. More information about bills of
gi given in the Listening section.
in
exercise with books closed, as the answer to the
‘question is just below in the Vocabulary exercise.
answer is letter of credit and bill of exchange, these are defined and discussed in the sections
) If you expect the learners to know the answers questions, they could discuss them in pairs. If think only a few learners will now, you could try to
‘answers from the whole class.
11 Financing international trade
Tolearn about: letters of credit and bills of exchange; key vocabulary of Petters ofcredit and bill of exchange
& _tolear nowt: check and conficm information
“—L__ To practise: checking and confirming information about financial products
Vocabulary
ANSWERS 1 letterofcredit, 2. bill ofexchange
Reading: How a letter of credit works
‘Ask learners to work together in pairs or small groups, using the diagram to help them.
ANSWERS
41 The applicant (the buyer) completes a Contract with the seller.
2 The buyer ills in a letter of credit
application form and sends it this or her bank for approval.
3 Theissuing bank {the buyer's bank)
‘approves the application and sends the letter ofcredit details to the seller's bank {the advising bank).
4. The advising bank authenticates the letter of credit and sends the beneficiary {the
seller} the details. The seller examines the details of the letter of credit to make
‘sure that he orshe can meet athe
‘conditions. necessary, he or she contacts the buyer and asks for amendments to be made.
When the seller (beneficiary) is satisfied with the conditions ofthe etter of credit, he orshe ships the goods.
6 The seller presents the documents to his or her bankers (the advising bank], The
advising bank examines these documents
‘against the details on the letter of credit.
‘and the international Chamber of Commerce rules.
?- Ifthe documents are in order, the advising bank sends them to the issuing bank for
payment or acceptance. Ifthe details are
‘not correct, the advising bank tells the seller and waits for corrected documents or
further instructions.
8 The issuing bank {the buyer's bank)
examines the documents from the advising bank. they are in order, the bank releases.
the documents to the buyer, pays the money promised or agrees to pay it in
‘the future, and advises the buyer about the payment. Ifthe details are not correct, the issuing bank contacts the buyer for
‘authorization to pay or accept the
documents.) The buyer collects the goods.
9. The issuing bank advises the advising/
confirming bank that the payment has been made,
10 The advising / confirming bank pays the seller and notifies him or her that the
payment has been made.
Listening: Asking for information about bills of exchange
As there may be some unfamiliar words in this conversation (e.g, drower, drawee, endorsed), ask learners to read trough the questions before they listen, The meanings ofthe words are explained in the dialogue. Leatners wil probably need to listen more than once to get athe answers. After listening, ask
learners fthey can give any examples from their work where they have had to ask for cartication, or carify something fr colleagues or customers.
BE Họ tới Financing nternavionaltrede
RED weescrit
Bank advisor: Trade Finance. Can |help you?
Customer: Hello, 'm calling from Capper Trading, We've just had a large export order our first, in fact ~
‘and we're planning to use a bill of exchange or a bank draft. Unfortunately, 'm not a all clear about some ofthe conditions.
Bank advisor: Well, perhaps ican clarify them for you. ' That's what Im here for!
Customer: OK. Your instructions talk about the drawer, the drawee and the payee. But aren't the drawer and the payee the same thing?
Bank advisor: No, The draweris the party that issues a bill exchange, and the payee is the party to
‘whom the bills payable.
Customer: Sorry, I don't quite follow you. Surely the bill is payable tous, as we're the seller?
Bank advisor: Well, that depends whether you use abank draft ora trade draft, Abank draftis payable to the bank. Unless you use a trade draft, issued by you.
Customer: Er, could you go over that again, please?
Bank advisor: If you use a bank draft, the buyer pays.
Us, and then we pay the money to you, less any charges due to us. f you, the exporter, issue
the bil t's referred to asa trade draft, andit's Payable to you
Customer: Oh, see. And if you issue the bil, it's generally payable 30, 60 or 90 days from the bill of iading date, is that right?
Bank advisor: Yes.
Customer: What exactly does that mean?
Bank advisor: The bill of lading is a document that the ship's master signs, acknowledging that the goods have been received for shipment, describing them, and giving details of where they are going. But of course you can always get the bill endorsed.
Customer: Sorry, did you say endorsed’?
Bank advisor: Yes, you can endorse itt the bank.
Customer: Could you explain that in more detail?
Bank advisor: Yes, We can endorse the bill before it
‘matures. That means we guarantee to pay the bill f the buyer doesn't. Then you can seit at a discount in the financial markets.
Customer: | don't quite see what you mean,
advisor: It means you can get most of the money immediately, and you don't have to wait for the buer to pay the bill. For example, you sell the bill at 99%, and the discount represents the interest the buyer could have received on their
‘money until the bill's maturity date.
bestomer: Oh right. OK, thank you very much.
Sank advisor: My pleasure. Goodbye.
ANSWERS
4 1 Thedraweris whoever issues the bill of exchange; the drawee is the company that has to pay the amount on the bill, and the payee is the company or institution that is paid.
2 Abank drafts issued by the bank, which receives the money (before payingit to
the exporter);a trade draftis issued by the exporting company, which receives the
money directly.
3. Because they can get the bill endorsed bya bank, which guaranteesto payitifthe — / importer does not. The exporter can then sell iton the financial markets and get the money that way.
4 Because the buyer deducts the amount of interest it could have gained on the money
‘until the bill matures.
2 Sorry, don't quite follow you.
Could you go over that again, please?
‘What exactly does that mean?
Sorry, did you say.
Could you explain that in more detail?
I don't quite see what you mean.
Language focus: Checking and confirming information
With books closed, ask learners f they know any phrases they can use when:
+ they don't hear what someone has said + they don't understand what someone has said + they dont think someone is being clear or precise
enough
The phrases for each ofthese situations are lsted later inthe Language focus.
POSSIBLE ANSWERS
2 1 Could you repeat that? /I'm sorry, could you say that (last part} again?
2 What exactly do you mean by beneficiary? /
Could you explain beneficiary, please?
3 Could you be more specific about which
conditions, please?
VOCABULARY NOTE
‘American English uses Pardon me? instead of Pardon?
Practice
See pages 118 and 127 of the Studen
file cards. Book for the
The page on Incoterms is based on the Incoterms walichart on the International Chamber of Commerce website: http://wwwiccwboorg/incoterms/wallchart/
walichart.pdf. Incoterms determine who pays forall the costs of international trade: transportation (or carriage], loading and unloading goods, insurance, customs duties, etc. The different terms, usually abbreviated to three-letter codes, are used al over the world, and so avoid uncertainties about whois responsible for paying for something ~ the buyer or the seller.
This role play involves a lt of reading soit would be a good dea forlearners to read the document before taking ona role. Divide the learners into pairs and
assign each ale (Aor B). The role of the advisor at the call centre should be given toa learner who reads
English quite well
You can select one pairto perform the roleplay again for the whole group
Pnoncingintemationltede Uatit 55
12 Meetings 2
CC seemdesapee
ro practise: holding ameeting abouta call centre
ates :
Lead in
This is based on an idea from wwweffectivemeetings.com.
Learners can look at the quiz and discuss their answers in small groups. You could then have a whole class
discussion to see if everyone agrees. Obviously, the point of the quizis to promote some discussion, so you might need to play devil's advocate and argue for the
‘more unusual responses!
ANSWERS o
The'correct’ {most sensible] answers are 1b, 2b, 3a, 4b.
Vocabulary
Tie aim ofthis exercise is to make learners aware of some ofthe most common collocations associated with meetings vocabulary, Point out thatthe words on theft are not synonyms, although some of them are similar iin meaning, When learning new vocabulary, itis useful tolearn these common combinations. You will need to check learners understand the meanings of al ofthe
correct combinations as they will need them in the next exercise
‘ANSWERS
1 thold 2break 3take 4set 5 deal with 6find ?do Bput Blookafter 10 come to POSSIBLE ANSWERS
2 1 approve/gothrough, take cha circulate
‘et, achieve /reach hold, deal with / tackle rejected
put forward)
i Meetings 2
To learn how to: conclude a meeting; ask for and give opinions;
‘VOCABULARY NOTE