How to make DA mode of payment safe

 

The information provided here is part of Guide on howtoexport and import 

Compared to any other mode of payments in international trade, Documents against acceptance – DA terms of delivery – is  the riskiest mode.  However, some of the  buyers in international trade seeks least period of credit  with the supplier – say 30 days from the date of bill of lading etc., even though  transit period of goods is more 

How to make DA mode of payment safe copy than 45 days.  In such case,  the buyer pays invoice value of goods to the seller before  reaching goods to buyer’s place.  If  supplier enter in to a contract without knowing  credit worthiness of buyer,  collecting export proceeds under DA terms is quite risky job.    Or after shipping goods, if the supplier realized   that the buyer’s credit worthiness is not satisfactory,  it’s hard job  for an exporter to collect his invoice value of his goods shipped.

How can supplier collect invoice value of goods shipped in such situation.

As you are aware, once after shipping goods, you need to release original bill of lading from carrier  and required to be sent  to your overseas buyer without which  the buyer can not take delivery of goods.   Shipper also can arrange Seaway bill procedures or OBL surrender procedures.   So in the example above,   if the supplier does not release Bill of lading from the carrier, the cargo at destination port can not be taken delivery by buyer.   If the credit period is 30 days from the date of bill of lading and  the transit time of cargo is 60 days from date of shipment,  supplier can hold bill of lading till he receives his amount of proceeds.  Either shipper can release Bill of Lading from carrier and hold the same with him till  overseas buyer pays or he  can delay  to release bill of lading from carrier.  However, some of the carriers impose penal charges on late release of bill of lading.

If OBL not released or OBL not surrendered by shipper at load port, the buyer can not release goods  at port of destination.

 

 

The above information is a part of Online export import training guide 

Other posts about Import Export online tutorial

What is Terms of Delivery in Imports and exports
 Difference between DDU and DAP
 Difference between export bill collection and export bill discounting.
 consignee in Invoice ‘To Order’
 Difference between Purchase Order and Pro forma Invoice
 Difference between Pro forma Invoice and Commercial Invoice?
Excise and Customs - Click here to read complete notification under Budget 2014
How to get Export Orders?
How to settle dispute in Exports and Imports?
Click here to know India Trade Classification(ITC)
Pre shipment bank finance to suppliers for exports through other agencies
Types of export containers
Measurement of export containers
Export Import Policy of India 2015-20
MEIS, Merchandise Exports from India Scheme
SEIS, Service Exports from India Scheme
Merge your Commercial Invoice and Packing List for all your future exports
Export procedures and documentation

What is Nom Is DP terms of payment safe in export business?

Is Letter of Credit LC safe for an Importer?

 Is ON BOARD CERTIFICATE required for LC negotiation

 How to make DA mode of payment safe

How to make delay in delivery of Shipment?

 How to minimize import cargo clearance time? An open logic proposal to WTO

How to obtain a duplicate BL, if original bill of lading lost.

How to obtain GSP - Certificate of Origin?

How to obtain Phyto sanitary certificate. What is phytosanitary certification

 How to obtain waiver on detention/ demurrage on imported goods/container from Shipping company/CFS

What is Manifest Hold by US customs on import

What is MET exam in US import customs clearanceinated cargo or Routing order shipment

What is NVOCC? How NVOCC can provide better rate than the main shipping carriers

What is packing credit in export business?

Transferability of Bill of Lading

Transhipment - A redefinition

Travelers to India under import duty exemption, Frequently Asked Questions Part 2

Triangular export

 Triangular shipment

Types of Insurance Documents.

What is Provisional Assessment in Import formalities in India?

What is said to contain in Bill of Lading.

What is Said to weigh in Bill of Lading

What is second appraisement of import clearance procedures

What is self assessment in import customs clearance in India?

 What is SGS Inspection in Exports and Imports?

 What is shipment Advice and what are the contents of shipping advice

What is Shipper Load, stow and count in Bill of Lading

What is Test Report in Import clearance
What is Shut out in export trade
What is swift transfer in import and export trade.

What is Tail Gate exam hold in US import clearance
How to make DA mode of payment safe
How to make delay in delivery of Shipment?   
How to obtain a duplicate BL, if original bill of lading lost.
How to obtain GSP - Certificate of Origin?
How to obtain Phyto sanitary certificate. What is phytosanitary certification
What is THC - Terminal Handling Charges
What is the difference between BAF and CAF
What is the difference between High sea sales and imports
What is the difference between re-exports and re-imports
Transhipment - A redefinition
Types of Insurance Documents

Travelers to India under import duty exemption, Frequently Asked Questions Part 2

Triangular export

 Triangular shipment

Types of Insurance Documents.

What is the earliest date can be mentioned on Bill of Lading. Can BL date and let export date be same day?

What is the Procedure for importing goods through Post offices in India

What is Third Party Exports? Difference between manufacturer exporter and third party exporter.

What is VACIS exam in US import customs clearance

When can an exporter release bill of lading from shipping company?

When does exporter get EP copy of shipping bill after customs clearance

Which category of exporter are you? Merchant Exporter,Manufacturer exporter,Service exporter Project Exporter or Deemed Exporter

 How to make DA mode of payment safe

How to make delay in delivery of Shipment?

 How to minimize import cargo clearance time? An open logic proposal to WTO

How to obtain a duplicate BL, if original bill of lading lost.

How to obtain GSP - Certificate of Origin?

How to obtain Phyto sanitary certificate. What is phytosanitary certification

 How to obtain waiver on detention/ demurrage on imported goods/container from Shipping company/CFS


Comments


HITESH KHANNA : IF THE SHIPPER FROM OVERSEAS SHIPPED GOODS ON DA TERMS OF 45 DAYS IN BANK AND WAS ASLO ACCEPTED BY BANK,WHAT CAN HAPPEN IF GOODS GET RELEASED BEFORE 45 DAYS AND THE BUYER DOESN'T PAY AFTER THAT.IS THERE ANY RESPONSIBILITY OF BANK IN THIS SITUATION.

Munish Taneja: You should take ECGC Policy to cover your risk against DA Payment terms.

Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers