Unit Four Remitting the Money

Active Vocabulary:

remittance

1) ремитирование, перевод денег

2) денежный перевод
движение наличности; разница
между наличными поступле­
ниями и платежами

1) чек

2) переводной вексель
выписывать чек
осуществлять клиринг чеков
банковская тратта

производство расчетов через расчетную палату; клиринг век­селей и чеков почтовый перевод телеграфный перевод

Text

There are several ways that a remittance from an overseas buyer can be transmitted to an exporter. An exporter's most important consideration is the speed at which this can be done — the quicker it is achieved the better an exporter's cash flow and the less the cost of any finance that may have to be^ raised to carry out an export contract.

In the contract where payment is on open account terms payment by a cheque from an overseas buyer might seem the simplest method. But there are several disadvantages. The

cheque will normally be drawn on the buyer's overseas bank in that national currency. So an exporter could be subject to

loss when the foreign currency is exchanged into sterling: there could be delays due to exchange controls in a buyer's country; there could be postal delays; and there may be de­lays while the exporter's UK bank clears the cheque with the overseas buyer's bank.

Payment could be made by a banker's draft. An overseas buyer's bank issues a cheque in favour of an exporter to be drawn on a bank in the UK. Exchange control problems in the buyer's country are avoided, but there could still be de­lays in the post and in clearances between the exporter's UK bank and any other banks in the chain of remittances.

The most common form of non-documentary payment for exports is by mail transfer (International Money Transfer). An overseas buyer instructs a bank in the buyer's country to transfer an amount of money to an exporter's UK bank by airmail, and in due course, the exporter receives payment. Unfortunately this can be a slow process. However, the UK exporter's bank branch can assist the exporter in reducing to the minimum any delays in mail transfers.

Although at first sight more expensive, a most effective way of making an international payment, because of the time saved, is by telegraphic transfer (Express International Money Transfer) or bank cable. Money is transferred by coded interbank telex and as long as the exporter makes it clear to the overseas buyer exactly which bank and account in the UK the remittance should be made to, the exporter, should receive very speedy payment through the system.

Delays in remittance can cost money, even cancelling out the profit in any contract, especially when the exporter is Paying interest on any financing or the exporter's cash flow is severely affected. So it is worth the exporter consulting the UK bank about remittance procedures in open account contracts. The exporter should generally ask the overseas buyer to remit to a specified UK bank branch by telegraphic

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transfer. If the export business warrants it, the export^. can consider opening bank account to collect funds and trans-fer them in bulk to the UK by telex at regular intervals.

In a new development, major banks including Midland have set up a computer system for interbank transfers called SWIFT, the Society for Worldwide Interbank Financial Tele­communications. SWIFT can achieve same-day transfers between banks which are linked to the system.

Whether exporting companies are large or small, they have to rely on specialists to achieve the most efficient (and there­fore least costly) method of receiving payment. It is here thai banks can make one of their most important contributions lo export business.

Comprehension.Answer the following questions:

1. What is the most important consideration for an exporter

when agreeing on the method of transmitting the pay­ment?

2. Why is speed in remitting money from the foreign buyer lo

the exporter of the utmost importance?

3. What are the drawbacks of payment by cheque?

4. Who issues a banker's draft?

5. What should the foreign buyer do lo remit paymenl by
mail transfer?

6. Which is Ihe quickest way of transmitting payment from
the foreign buyer to Ihe exporter?

7. What should the foreign buyer know exaclly before he
remits paymenl by telegraphic transfer?

8. Who can advise Ihe exporler besl aboul remitlancc pro­
cedures?

9. When is il worthwhile for the exporler lo open a bank
_raccounl abroad?

10. Whal does SWIFT sland for?

11. How quickly can payments be remitted by SWIFF?

12. Find out whal Russian banks are members of SWIFT.

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II

Comprehension.Fill in the following on the basis of the information given in the text: