How to explain the payment method of foreign trade DP?

d p, that is, bank collection, means that you hand over the documents to your bank, and your bank then sends them to the other bank (generally the bank designated by the customer) The other bank notifies the guest after receiving the bill, and the guest takes the bill after paying.

The operation process of d p.

As a type of collection business, DP (document against payment) is divided into two basic transaction types: spot DP and forward DP. At present, in the international ** settlement, all parties follow the ICC's Uniform Rules for Collections (currently applicable ICC Publication No. 522, referred to as URC 522 in practice) to deal with the DP business.

Documents Against Payment (DP).

A document against payment is a condition of the seller's submission to the buyer's payment, i.e., when the exporter hands the bill of exchange together with the shipping documents to the bank for collection, the bank is instructed to surrender the shipping documents only when the importer has paid for the goods. If the importer refuses to pay, the shipping documents cannot be obtained from the bank and the goods under the documents cannot be collected. According to the different payment time, the document against sight and the document against demand can be divided into two types: document against sight and document against usance.

1.Documents Against Sight (DP at sight) is a bill of exchange and shipping documents presented by the exporter to the importer through the bank, and the importer is required to pay at the sight of the bill (or the bill) and collect the shipping documents after the payment has been paid in full.

2.Statement Against Demand (DP after).

sight) means that the exporter presents the bill of exchange and shipping documents to the importer through the bank, and the importer accepts the bill of exchange, and obtains the documents from the collecting bank after payment when the collecting bank reminds it again on the maturity date of the bill. The bill of exchange and shipping documents are in the possession of the collecting bank until payment is due.

First, the overview of the two is different:

1. Overview of CAD payment: CAD (Cash Against Documents, referred to as CAD), after the export shipment is completed at the export place, the shipping documents are in the export, import or third country to the destination.

2. Overview of DP payment: Documents Against Payment (DP) refers to a settlement method in which the collecting bank must pay the price of the goods before handing over the commercial (freight) documents to the importer.

Second, the process of the two is different:

1. The distance of CAD payment:

1) The seller (exporter) shall indicate the documents to the buyer's bank at the place of export; collect payment for goods;

2) The seller requests payment from the person designated by the buyer at the place of export, and the process is the same, and the related party only changes the payment bank at the place of export to the person at the place of export (non-bank);

3) The seller destructs the correspondent bank (collecting bank) of the place of export to the bank of the place of import (the collecting bank) to present the documents and request the collection on behalf of the seller.

2. The process of DP payment:

1) The buyer and the seller agree in the contract to settle the settlement in the DP method, which is the basis;

2) Prepare all documents (including shipping documents such as bills of lading, and commercial documents such as bills of exchange, invoices, etc.) after the seller delivers the goods;

3) The seller submits a request to the foreign exchange bank to handle DP collection, fills in the collection instruction and delivers all documents;

4) The seller's foreign exchange bank will accept the collection instructions and all documents after examination and acceptance, and issue a receipt to the seller;

5) The seller's correspondent bank will send the full set of documents to the buyer's correspondent bank in two batches (the bank may be designated by the seller's bank or the seller may be the seller in the collection instructions, the latter is the majority);

6) After receiving all the documents, the buyer's bank will remind the buyer of the documents;

7) The buyer pays the money to the buyer's bank (in the case of spot DP), or the buyer accepts the documents after reviewing the documents and pays when due (in the case of forward DP);

8) The buyer's bank will hand over all the documents to the buyer after receiving the buyer's payment;

9) The buyer's bank transfers the money received to the seller's bank, which in turn transfers it to the seller's bank.

Expansion Wheel Old Information:

Precautions for DP Payment:

1. In the D P business, the guarantee for the exporter to obtain payment is the credit of the importer, so it is an important prerequisite to pay attention to the importer's ability to pay and business reputation.

2. After the delivery of the goods, in the process of the circulation of documents from the exporter to the importer, it is necessary to pay attention to the control of the goods through the control of the documents, and the documents should be firmly controlled before the importer pays.

3. In practice, problems often arise at the transfer and handover points of documents, that is, the handover point between the exporter and the bank, the handover point between the seller's bank and the buyer's bank, and the handover point between the buyer's bank and the importer. Therefore, it is necessary to control these handover points, and the documents should be circulated in accordance with the specifications.

4. Try to use the way of indicating the bill of lading. This allows the goods to be controlled by controlling the bill of lading.

d p refers to the document against payment, which refers to a settlement method in which the collecting bank must pay the price of the goods before handing over the commercial (freight) documents to the importer. The document at sight (D P Sight) points out that the port side issues a demand bill, and the Tanling collection bank reminds the importer that the importer must pay after seeing the bill, and when the payment is paid, the importer obtains the freight rock waiter document.

d a refers to the document against acceptance, which means that the exporter's document is subject to the importer's acceptance on the bill of exchange.

That is, the exporter issues a usance bill of exchange after the shipment of the goods, together with the commercial documents, and reminds the importer through the bank, and after the importer accepts the bill, the collecting bank will hand over the commercial documents to the importer, and only when the bill of exchange expires, will the payment obligation be fulfilled. Because the document against acceptance means that the importer only needs to handle the acceptance on the bill of exchange, he can obtain the commercial documents to pick up the goods. Therefore, the Documents Against Acceptance method is only applicable to the collection of usance bills.

Doc Against Acceptance is a commonly used payment method in the world. The exporter, through the collecting bank, instructs the collecting bank to issue the title and other shipping documents to the importer after the importer accepts the bill. Exporters will be exposed to the risk of non-compliance with the due balance of the importer.

d p Doc Against Payment is a very common one in foreign trade terms, it refers to a settlement method, after the bank pays off the payment on behalf of the receiving importer, the commercial (freight) documents can be handed over to the importer, and the importer can get the payment.

The business process of Doc Against Sight and Forward Payment (DP) is basically as follows:

1. The buyer and the seller agree in the contract to use the documents of payment as the basis for settlement.

2. The seller prepares all documents (including freight documents such as bills of lading and commercial documents such as bills of exchange and invoices) after delivery.

3. The seller shall request the foreign exchange bank to handle the bill of lading collection, fill in the collection instructions, and deliver all documents.

4. After examination and acceptance, the seller's foreign exchange bank shall accept the collection instructions and all documents, and issue receipts to the seller.

5. The buyer's ** bank will send a full set of documents to the buyer's ** bank in two batches (the seller's bank may specify the bank, or the seller may indicate it in the collection instructions, and the latter will be the majority).

6. The buyer's bank shall submit the documents to the buyer after receiving all the documents.

7. The buyer pays the buyer's bank (documents at sight), or the buyer accepts the payment after reviewing the documents and the payment on the due date (if the documents are filed with usance).

8. After receiving the buyer's payment, the buyer's bank shall hand over all documents to the buyer.

9. The buyer's bank will transfer the money received to the seller bank and the base bank.

d p Doc Against Payment risk, in the Doc Against Payment business, the bank does not review the content of the documents, the bank does not bear the obligation to pay, the bank only provides transfer documents, presents the documents on behalf of the bank, collects and transfers on behalf of the bank, and other services. In the acceptance business, exporters should pay attention to the following important issues:

1. In the DP business, the guarantee of the exporter's payment is the credit of the importer, so paying attention to the importer's ability to pay and business reputation is an important prerequisite for obtaining payment.

2. After the goods are delivered, attention should be paid to controlling the goods by controlling the documents circulating from the exporter to the importer, and the documents should be strictly controlled before the importer pays.

3. In practice, there are often problems in the circulation and transfer of documents, that is, the contact points between the exporter and the bank, the contact point between the seller's bank and the buyer's bank, and the contact point between the buyer's bank and the importer, so it is necessary to control these contact points and distribute the documents in accordance with the specifications.

4. Try to use the bill of lading as much as possible, so that you can control the goods by controlling the bill of lading, although in these two cases, the importing bank must pay the importer in order to deliver the documents to the importer, but the legal risks of the two should be the same, but due to the different risks faced in business practice, the exporter is more likely to directly urge the buyer to pay the buyer.

If you use the DP payment and delivery method, you need to be familiar with the freight forwarder, and then in the process of foreign trade, you must pay close attention to all aspects of the buyer's operation.

d／p（documents

against

payment), that is, the buyer obtains the documents through the designated bank after payment. The seller's submission is conditional on payment by the buyer.

1. The meaning of d a and o a:

1. D a: Documents against Acceptance (documentsagainstacceptance, abbreviated as d a), which means that the exporter's documents are subject to the acceptance of the importer on the bill of exchange. That is, the exporter issues a usance bill after the goods are shipped, together with the commercial documents, and reminds the importer through the Silver Spine Fuel Bank, and after the importer accepts the bill, the collecting bank will hand over the commercial documents to the importer, and the payment obligation will be fulfilled when the bill of exchange expires.

2. O A: Bookkeeping (openaccount), which can also be said to be credit sales, is generally called account release. It means that the seller sends the goods to the buyer when the buyer promises to pay for the goods in a quarter, half a year or a year (generally 90 or 180 days).

2. The difference between D A and O A:

1. The documents are different: certain commercial documents should be issued under the D A payment method, and there are no commercial documents under the o A payment method;

2. The risk is different: D A has certain commercial documents, and the risk is lower than that of O A, while the payment method of O A depends on the commercial credit of the importer, and the risk is higher.

d a is the meaning of document against acceptance. OA stands for open account.

Differences: 1. Different payment methods: D a is a guarantee made by the importer to the bank to make payment within a few days, and the bank will give the importer a bill of lading. OA is cash on delivery.

2. The transaction method is different: OA means that the seller will ship the goods first and send a full set of documents to the importer, and the importer will send the payment to the exporter on a future day in accordance with the contract. d a is the exporter after the shipment of goods to issue a usance bill, together with the commercial documents, through the bank to the importer, after the importer accepts the bill, the collecting bank will hand over the commercial documents to the importer, when the bill of exchange expires, to fulfill the payment obligation.

3. The commonality of payment methods is different: D a is a commonly used payment method in the world. OA is one of the ways of trading in the international **.

d/adocumentary

against

acceptance).

The buyer shall accept the documentary draft issued by the seller for payment on the day after the sight of the bill at the time of prompting, and shall pay the bill of exchange on the due date. Submission of documents after acceptance. Doc against Acceptance does not imply payment due to the buyer, it depends on the creditworthiness of the buyer. o/a，open

account

Credit. account", 'Account'. The general abbreviation is:"o/a", which is payment after delivery.

After the goods are exported, the seller will send the shipping documents directly to the buyer, and the payment will be credited to the buyer's account in the name of the loan, and the settlement will be made after the expiration of the contract. This kind of transaction in the way of bookkeeping is quite risky to the seller, and it is rare in the international market except for large companies to sell products to overseas branches or subsidiaries.