Question

Question 4: If payment is planned to be by made by open account and stipalatcs terms of payment as " 100% payment made by T/T within 30 days after shipment. The sell relcase full set of shipping documents including documents title to the goods within 5 days after shipment by courier". How can the seller decrease risks?

Answer 1

This is really a very sensitive trade in between seller and buyer. In general, the seller will not take a risk to believe buyer and at the same time buyer also think like the same as a seller. In this situation, the intermediary person/T/T required to handle this trade in between seller and buyer. This T/T will get the payment from the buyer and once the shipment received to the buyer from seller then immediately released the payment to the seller by a T/T.

Normally these intermediary works must approve by the government so the confidence makes buyer and seller step in trade. In the process of the trade, at first, the buyer will make full payment to T/T so once it is reached the full amount to T/T then the seller releases the shipment without documents. Once the buyer receives the complete shipment then the T/T or intermediary release either full payment or most of them issue 80% of payment to the seller.

The seller sends the all documents to the buyer after 5 days once it is confirmed to the T/T person by the buyer then T/T will release the rest of amount to the seller. While in this process, if the T/T failed to pay the amount within 30 days to the seller then the buyer will not get documents so the buyer and seller can sue against T/T, according to their agreement. In this way, the seller can do reduce the risk.