Payment procedures in Triangular exports

Payment procedures in Triangular exports copy

The information provided here is part of Export Import Online Tutorial

Before reading this article, I suggest my readers to go through all other articles related to triangular trade which make you more clear about the procedures and formalities of triangle trade.

In a triangular exports and imports, if A obtains order from B and transfers export order to C who is final supplier, the terms of contract between parties each other can be explained below with  two levels.

Level 1. Transactions between A & B

Level 2. Transactions between A & C

In the example level 1 above, A acts as seller of goods and B acts as buyer of goods. A delivers goods to B by sourcing goods from C. On maturity of payment agreement each other between A and B at the time of placing order, B pays the agreed amount to A against his invoices. In other words, the foreign exchange is transferred from B’s country to A’s country.

payment under triangular exports

In the example level 2 above, A acts as a buyer of goods and C as seller. C ships goods to B’s place, but invoice to A. On maturity date of agreement on payment between A and C, C receives payment from A as per their agreed terms. In this case, the foreign exchange is transferred from A’s country to C’s country.

Also read - Documentation for triangular shipment   Triangular export    Bill of Lading procedures in triangular shipment What is switch Bill of Lading?   Procedures and documentation on Triangular shipments
How to protect parties each other in triangular exports   Switching documents in triangular Exports and imports

what is triangle exports

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The above information is a part of Import Export Training online

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Nikos Giannakakos: I am about to set up a company in Dubai selling fashion products and accessories to USA. My company will act as a distributor co-operating with designers from Greece (at least initially). I am puzzled with the process for collecting and delivering the products from Greece (multiple locations) to USA (multiple locations). I have read that such transaction a.k.a triangle import/export.I would like if you can help me with the following: 1) First of all is it possible the Dubai company order from Greece and deliver to USA customers (retail shops) 2) What kind of documentation is required (invoices, pick-up list, certification of origin, etc.). 3) Are there any taxes/duty fees or other fees at the Greek customs for exportingg the products. How are these handled? 4) Are there any taxes/duty fees or other fees at the USA customs for importing. How are the handled? 5) Are there any barriers that I should know in advance that might postpone export of products from Greek customs or import of products from USA customs?

sriram: thanks for giving the overview about triangular trade. Just have a question, in a situation where A from India despatches goods to C in say Thailand against COO certificate against despatch instruction from B in say USA. What is the value which needs to be captured in documents. For example, let us assume A cost plus margin is Rs.108 and B, USA invoices to C in Thailand at 120/. In this situation what values to be mentioned in COO, Shipping Bill, in India. Can we take 120 as the FOB value of exports?

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