It is used before concluding the transaction

2. Complete the following on the basis of the information given in the text:

1. An exporter draws a bill of exchange on a foreign buyer means….for…..the value of the invoice of goods for export through the banking system for payment

2. The bill is called a sight draft if it is payable …”on demand”
3. The bill is called a term draft if it is payable “at a fixed or determinable future time”

4. The tenor of the bill is… . the buyer is receiving a period of credit

5. To accept the bill means to… sing an agreement to pay on the due date .

6. A term draft does not have to be paid at sight but “at a fixed or determinable future time” … .

7. The goods cannot be released to a foreign buyer until the bill…the bill is paid or accepted by the overseas buyer .

8. The foreign buyer does not have to pay or accept the bill until the goods delivery from the exporter.

9. A clean bill collection means that … . bill is presented to whomever it is drawn upon, for immediate payment if it is a sight draft, or for acceptance if it is a term draft.

10. A documentary bill collection means that, …the most important of which is…an exporter sends the bill to the buyer through the banking system with the shipping documents, including the document of title to the goods, i.e. an original bill of lading.

11. Under a documentary bill collection the bank releases documents on payment or acceptance

12. The foreign buyer cannot get hold of the goods unless he pays the bill or accepts

13. If the exporter insists on immediate payment he can use the banking system for a cash against documents (CAD) collection.

14. A promissory note is issued by a buyer who promises to pay an exporter a certain amount of money within a specified time.

15. Who in this way guarantees the UK bank

16. A direct collection means that It is even possible to send the documents and bill of exchange directly to an overseas buyer’s bank, bypassing the UK bank.

17. The system of direct collection is supported by US banks…, but it involves a certain risk particularly when there is excessive shipping delay

18. If the buyer refuses to accept or pay a draft on presentation, the exporter’s Bank can act the exporter’s agent by arranging the warehousing of the goods or their reshipment, or even disposing of them at auction to recoup any outlay.

19. To protest a draft means - An overseas buyer may deliberately default on a term bill or just go bankrupt.