| <1> Definition |
- A international bill of change deal is control by Uniform Rules for Collection,
1978 that is established by the Bill of Exchange Act, 1882and the international
commercial committee.
- A formal marketable securities that an exporter consigns unconditional payment to an importer of the entire debt amount by a nominee or a holder during International
trading. It is transferable and marketable bond in accordance with endorsement which is acknowledge as the1st right of pledge(The 2nd right of pledge is L/G).
- For bill, the first Bill of Exchange and the Second Bill of Exchange should be
presented as a Set. |
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<2> The kinds of bill of change related to trade |
1. Documentary Bill of exchange--bill of change issued together with shipping
documents.
2. Clean Bill of exchange--bill of change without shipping documents attached.
3. Bill of documentary collection--bill of change issued for collection purpose same
as D/A, D/P.
4. Sight Bill of exchange--When bill of change is presented to a drawee, a bill of
change to be pay at sight.
5. Usance Bill of exchange--bill of change which will be paid when it is presented
to drawee within a fixed period from the presented date (at xx days after sight), or after fixed period of the B/L Date (at xx days after B/L date) is elapsed. |
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<3> Bill of change related parties |
1. drawer-- A person issuing bill and signing (Exporter)
2. drawee-- A debtor granted to payment consign.
3. payee--A person who will actually receive the amount of bill of
change (Normally a Nego bank) |
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<4> Indicating items for bill of change |
1. Required indication items
- Even if there is one omission for the required indication items, it will have no
binding force or legal effect as a bill of change. |
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| a. Mark for bill of change |
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- Indicate word 'first(or second)' or 'number' to indicate the original set
issuance order number in the center of a bill of change document and on the top left center, indicate 'Bill of Exchange' wording. |
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| b. Unconditional order in writing and the amount |
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- order in writing--center of the body of the letter, indicate after the kinds
of 'bill of change' selection section
Example-"pay to ~ the sum of ~"
- Amount-- Write after 'the sum', words and numbers to be write in together
and the kinds of currency has to be cleary stated. |
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| c. Drawee and payment location |
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- It will be written right next to a drawer's signature under 'To' indicate a
drawee's name which is the bill of change payer. |
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| d. Indicating payment maturity date |
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- It will be written on the next line from the paying location indication, and
for sight bill, indicate as at sight, for usance, write the said period after
'at'.(Ex-at 90days after sight)
- Bill of change maturity date method |
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1. At sight
2. at ~ days after sight
3. at ~ days after date
4. on ~ date |
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- Payee is to receive the amount defined by a bill (Or the instructor to
nominate a payee) and the indication location on a bill of change is next to 'pay to' which is 'unconditional order in writing' and the indication method will be changed as per the following styles of bill.
- Indication examples |
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- endorsement--pay to xx bank, Ltd,(Specify a payee t receive and indicate the name only (Usually a Nego bank)).
- Instructional--pay to xx Bank Ltd. or Order, or Pay to the order of xx Bank, Ltd.(The name to be received or in the meaning that the
person is the instructed person it is indicated as 'order of').
- Bearer--pay to bearer(Indicate a word bearer).
- optional non-registering method--pay to xx Bank. Ltd. or
bearer(The name of recipient and bearer are to be indicated
together). |
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| f. Indicating issuance date and the location for issuance |
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- Right next to the Bill of exchange, indicate the issuing location (The city
name of a Nego bank's location ) and the date of issuing date together in a line.
- A issuing location becomes the basis for the bill application law, and the
issuing date must be within the L/C validity date. |
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- A issuer becomes a beneficiary of L/C and the signature must be
correspondent to the signature made for a bill of change agreement that
was reported to a bank. |
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2. Voluntary indication
- Although the voluntary indication has to effect to the effect of a bill,
it is to help a bill's character and the details more clearly. |
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1. Interest rate, refusal certificate preparation and waive wording, payment
terms
2. The L/C number or a contract number .
3. Indicate number of bill of change issued. |
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<5> Things to be cautious when preparing a bill of exchange |
1. At all possible, do not correct. Especially, if there is a traces demonstrating
correction at the amount section, the bill of change itself will become invalid.
2. Clearly state currency mark as US$, Stg. .
3. If some banks are using "The" in front of their name, do not omit this.
4. If L/C is requesting indication about interest, it needs to be indicated as
L/C indication but refrain from indicating "with interest" "interest 5% for Dollar".
5. If a drawer is a corporation, the person signed has to indicate its title and
it has to be same as reported signature to a bank(or name plate).
6. Bill of change amount and amount of invoice have to be correspondence and
the indicated amount of L/C should not be exceeded.
7. The bill of change should be always issued to an opening bank, confirming bank
or a drawee bank, if issued to an applicant, a bank handles it as a simple
documents.
8. Indicate amount with words and numbers.
9. For double bills, indicate as First and Second. |
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<6> The necessity of L/C transaction and bill of change |
- Although negotiation credit, accepting credit, reimbursing credit requires bill of
change, paying credit and usance credit doesn't required bill of change.
- The former case: Due to partial Nego, discount means and the finance market
and convenience in requesting and paying, bill of change is necessary.
- The latter case : To minimize the process of Nego and to reduce expenses, omit
bill of change attachment |
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<7> Preparing method |
a. Bill number--Indicate for the sake of referring.
b. Issuing location |
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- Since the effect of bill of change is processed at the conducting location,
the location of issuance must be indicated.
- Indicate only the name of city for the issuing location. |
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c. Issuing date-- The date that a foreign exchange bank Nego presented
shipping documents and the bill of change.
d. Amount |
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- The amount of bill of change must be corresponds to the amount of the
commercial invoice. However, if L/C requires a bill issued under 100% of a
commercial invoice amount, the term should be fulfilled.
Ex) "available by your draft at sight on us for ~% of invoice value" |
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| e. Indicate maturity date (Payment terms) |
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- For At sight : Indicate as 'at o o sight of'. For usance : Indicate as 'at o o
days after sight' or as 'at o o days after B/L date' format.
- For exposure date : Indicate payment period on the same section. |
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- It will be indicated next to 'pay to' wording of bill of change and usuary a
purchasing bank is to be indicated with L/C transaction. |
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| g. Amount written in words |
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- A section where the bill of change amount is to be written in words, for an example, ' US Dollars Eleven thousand forty only'.
- When amount written in numbers and words are different, the amount written
in wording is to be the bill amount.
- The currency to be indicated should be clearly stated as US Dollars(US$),
Sterling Pound(Stg) not Dollars($) or Pound(). |
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- Instruction from a bank to a drawee meaning, when settled, the amount to
be debit from the person indicated under "Account of~ " .
- Under "Account of~ ", Accountee of L/C is to be indicated. |
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- Under "Drawn Under~ " indicate an opening bank(Issuing Bank) of L/C.
For D/P, D/A, and non-draft L/C methods, leave it blank or indicate a
drawee bank of a contract. |
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- If L/C is requesting, indicate T/S number together. If D/A, D/P, indicate a
contract number.
- If there is "combined shipment with other credits are acceptable" on L/C
indicate as the following "Drawn Under L/C No~for US$ ~ and Drawn Under
L/C~ for US$~" |
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k. L/C issuing date --Issue date of L/C
l. A drawee the place to pay |
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- Unless the place of pay is indicated clearly in the L/C a city name is
enough.
- If no need to indicate the place of pay, indication of a drawee can be the
supplementing place and the bill effect can be remedy.
- A drawee can be an opening bank of L/C or an applicant or other
third banks.
- When L/C is nominating a drawee : "Documentary credit which is
available by negotiation of your draft at sight drawn on~". if "~on
accountee" case : An applicant of L/C is a drawee. If under "~on~" is not
an opening bank: That becomes a drawee bank. |
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- The bill of change issuer should make the corresponding signature that was
reported to a bank when a bill of change agrement was concluded. |
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Trade Helper 
L/C(Letter of Credit)
{1} Letter of credit
[10] Documents related to L/C 
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