To discuss: The steps to be followed by the exporter to take the effect to export to Country P from City C.
Introduction:
Export refers to the sending of goods from one country to another country and whereas import refers to receiving goods from one country to another country.
Explanation of Solution
The steps to be followed by the exporter to take the effect to export to Country P from City C:
Step: 1
Country P (importers) places an order to Country U (exporters) if they are willing to ship under the letter of credit.
Step: 2
Specification of details on delivery item and price
Step: 3
The importer should apply to any international bank (Bank of city M) to get the letter of credit in the favor of exporter.
Step: 4
The bank will send the letter of credit to the exporter’s bank (City C bank and trust).
Step: 5
The exporter’s bank will advise the exporter to open the letter of credit in its favor.
Step: 6
A common carrier is used by the exporter to importer. This will give the exporter a bill of lading.
Step: 7
The export will give 90 days’ time to export bank (City C bank and trust) which is drawn on bank of City M in agreement with letter of credit and bill of lading.
The exporter will endorse the bill of lading so that the title of goods will be transferred to holder of the document.
Step: 8
Then the exporter bank will present the draft to the importers bank and they will accept the draft and will promise to pay them in 90days
Step: 9
Bank of city M will return the draft to City C bank and trust.
Step: 10
Exporter bank will intimate the export that the draft was accepted by them and payable in 90 days.
Step: 11
Now the export will sell the draft at discount with City C bank and trust and receives the discounted cash value in return.
Step: 12
The importers bank will notify the importer on the arrival of the document and the bank will release the document and the importer can take the possession.
Step: 13
The bank of city M will receive the cash in 90 days so that it will have funds to pay the drafts which are maturing.
Step: 14
In 90 days the final stage is that the City C bank and trust will present for the payment to the bank of City M and the bank will pay.
Want to see more full solutions like this?
Chapter 16 Solutions
International Business: Competing in the Global Marketplace
- Many computer hardware manufacturers rely on foreign companies to provide raw materials; build computer parts; and assemble hard drives, monitors, keyboards, and other components. While there are many advantages to dealing with foreign suppliers, hardware manufacturers may find certain aspects of their business (such as quality and cost control, shipping, and communication) more complicated when dealing with a supplier in another country. In addition to these fairly common business problems, hardware manufacturers are sometimes faced with serious ethical issues relating to their foreign suppliers. Two such issues that have recently surfaced involve (1) suppliers who run their factories in a manner that is unsafe or unfair to their workers and (2) raw materials suppliers who funnel money to groups engaged in armed conflict, including some that commit crimes and human rights abuses. In February 2009, alarming information came to light about the Meitai Plastics and Electronics factory in…arrow_forwardMany computer hardware manufacturers rely on foreign companies to provide raw materials; build computer parts; and assemble hard drives, monitors, keyboards, and other components. While there are many advantages to dealing with foreign suppliers, hardware manufacturers may find certain aspects of their business (such as quality and cost control, shipping, and communication) more complicated when dealing with a supplier in another country. In addition to these fairly common business problems, hardware manufacturers are sometimes faced with serious ethical issues relating to their foreign suppliers. Two such issues that have recently surfaced involve (1) suppliers who run their factories in a manner that is unsafe or unfair to their workers and (2) raw materials suppliers who funnel money to groups engaged in armed conflict, including some that commit crimes and human rights abuses. In February 2009, alarming information came to light about the Meitai Plastics and Electronics factory in…arrow_forwardExport Import Practices and Procedure 1. Identify the different terms of sales that are used in international business. 2. Compare and contrast the alternative methods of payment that are common in international business transactionsarrow_forward
- If your companies import Cements to Vietnam, what are the documents you need to request your exporters, and what documents you prepare yourself from Vietnam?arrow_forwardYou are in the business of importing used from the UK to Namibia through the Walvis Bay port, list 3 documents required by Namibia and 3 documents required by the UK government that are relevant to this transaction.arrow_forwardExamine how the scale of a country's economy influences international trade and, as a result, international logistics.arrow_forward
- Do a foreign company exporting products to the philippines could be considered doing business in the country?arrow_forwardWhich of the following is true of exporting? a) It is preferred when tariff barriers are high. b) It is the preferred mode for selling bulk products globally. c) It prevents firms from achieving experience curve and location economies. d) It avoids the costs of establishing manufacturing operations in the host country. e) It gives maximum control over the distribution networkarrow_forwardDiscuss why you believe the products sold by Cape Union Mart is a good example of an exportable product.arrow_forward
- List and briefly describe the three political and economic risks encountered when entering a foreign country. Give typing answer with explanation and conclusionarrow_forwardThe Malaysian timber industry continued to perform well despite the Covid - 19 pandemic and its associated economic fallout , with exports recording a growth of 3.1 percent to RM22.7 billion in 2021 from RM22.02 billion in the previous year . There was a surge in demand for Malaysian plywood in Japan and the United States in 2021 . Timber products are to be exported from Malaysia to Japan and United States in bulk . Propose an appropriate mode of transport . Specify the advantages and disadvantages of such a mode .arrow_forwardAn American importer of English clothing has contracted to pay an amount fixed in British pounds three months from now. If the importer worries that the US dollar may depreciate sharply against the British pound in the interim, it would be well advised to a. Buy pounds in the forward exchange market. b. Sell pounds in the forward exchange market. c. Buy dollars in the futures market. d. Sell dollars in the futures market.arrow_forward
- BUSN 11 Introduction to Business Student EditionBusinessISBN:9781337407137Author:KellyPublisher:Cengage LearningEssentials of Business Communication (MindTap Cou...BusinessISBN:9781337386494Author:Mary Ellen Guffey, Dana LoewyPublisher:Cengage LearningAccounting Information Systems (14th Edition)BusinessISBN:9780134474021Author:Marshall B. Romney, Paul J. SteinbartPublisher:PEARSON
- International Business: Competing in the Global M...BusinessISBN:9781259929441Author:Charles W. L. Hill Dr, G. Tomas M. HultPublisher:McGraw-Hill Education