What happens if overseas buyer not paid export bills discounted.

 

The information provided here is part of Online export import training guide 


What happens if overseas buyer not paid export bills discounted?

  

Bill discounting and collecting money from bank does not mean that exporter received amount from overseas buyer under his export consignment. Export bill discounting can be treated as a ‘loan’ amount receiving from his bank like any other negotiable instrument. Here the bank discount export bills and provide amount to exporters on the basis of export bills. Once after receipt of invoice amount from overseas buyer against such export bills, bank recovers the said discounted bills with exporter.

 

Here the question is, if overseas buyer does not pay amount of export sales, how does bank recover discounted export bills?

What happens if overseas buyer not paid export bills discounted

In an export bill discounting procedures, the exporter gets money immediately up on shipment of goods from his authorized bank. The bank receives amount only after collection of export bills from his overseas buyer as per the agreed terms and conditions between exporter and importer.

What happens if importer (overseas buyer of exporter) does not pay invoice amount under the said discounted bills.


Shipments under DAP or DP terms, the bank has a hold on documents as overseas buyer’s bank does not release shipping documents to importer unless otherwise he pays the value of goods mentioned in the commercial invoice. However in a DA terms of shipments, the risk on credit is high for exporter’s bank in the case of non availability of credit worthiness of such buyers.

 

Normally the exporter’s bank debits back the discounted amount along with necessary bank interest charges with exporter’s account if discounted bill amount has not been realized from overseas buyer. However, banks in some of the countries cover insurance against overseas buyer up to the limit of bill discounting.

 

In India, bank covers insurance policy with Export Credit Guarantee Corporation ECGC who compensate such amount, if not paid by overseas buyer.

 

Have you satisfied with this information about discounting of export bills with bank and consequences of nonpayment of export bills by overseas buyer? Do you wish to add more information about this subject about discounting of bills, default of payment by overseas importer against export sale of goods?

 

Would you wish to share your experience and knowledge about export bill discounting, nonpayment of export bills by overseas buyer or consequences on default of payment by overseas buyer against export discounted bills by bank?

 

Comment below your thoughts about this article - What happens if overseas buyer not paid export bills discounted?

 

 


The above information is a part of Import Export course online


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Comments


Sylvain: I would like to have some advice on the following scenario. Suppose a Bank offers bill discounting to Company X (seller) who sells goods to Company Y (buyer). Company X submits the invoices to the Bank who then pays Company X. Company Y is supposed to pay Company X within two months after receipt of goods. Security: Insurance policy covering this type of transaction. In the insurance policy there is an exclusion clause which says that the policy is void if there is any relationship between buyer and seller, i.e. sister company, family members, etc. If the Company Y does not pay Company X and the insurance is void based on a proven relationship between these two companies, what recourse does the Bank have to recover its due? Thanks

DEBABRATA ROUT: Sir, i am a exporter and i send cargo to overseas buyer from BRAZIL in the payment term of 30% advance & 70% against BL copy, but the buyer only paid us 30% advance, now he is not pay us the balance 70% amount and not release the BL from last 8 months. and the surprise thing is now we get the news that he release the cargos from Brazilian Custom. when we ask to shipping agent about that they tell us that in brazilian law no need the HBL copy to release the cargo. So can you please help me to find the solution how i can recover my money from that buyer.

Admin: Hi DEBABRATA ROUT, If issuing carrier (here, HBL issuer) is government authorized, you have the right to sue against the said freight forwarder who issued HBL. In India, Multi Model Transport Operater license issued by Ministry of Shipping, Mumbai is the authorized one.

Naresh Kumar Garg: I have exported garments to UK on 90 days DA basis. After the presentation of the documents we got acceptance & value date of the payment from UK Bank. But even after 60 days past from the value date buyer has not made payment. We are in touch with buyer, he is not denying to pay but on the other hand he is not paying. So pls. suggest what to do now??

hari: Hello sir/madam, opening a account in bank on company name is difficult or easy.Any one can give answer for me please

Parveen Sharma : For Exporters in Brazil, please be careful, before exporting goods to Brazil, you must secure your payment becauase in Brazil as per the new custom rules, the importer do not need original B/L any more for releasing the cargo. The brazilian custom can allow goods without the original B/L.

Parveen Sharma: please do not work on DA term, its not safe. Exporter is not sure to get money unless he has very good relations with importer.

Mr. Tay: Dear Sir/Madam, I would like to export Vietnam Rice to India with cheapest price, but I don't have importer in your country. If any one has demand about this field, please contact me via email: tantay.logistics@gmail.com Currently, I'm working at DB Schenker Viet Nam Company so I have more experiences and available to help you in Vietnam Market. I look forward to your cooperation. Thanks & Best Regards. Pham Tan Tay

Atiq ur Rahman Syed: Dear Sir/Madam, we are facing problem to receive our balance payment from Iranian buyer. shipment was on nomination basis. Is anyone can suggest us, for the best option to receive our balance payment form the buyer. Thank you. Regards, Atiq.

Kunjal Patel: Hi I have exported onion to a party in Dubai. Credit limit was for 20 days . Even after 75 days of crossing limits I didn't get my payment. Can anyone suggest how to complqin in dgft So tat other exporters will be cheated by this company.

MD.Moshiur Rahman Khan: Dear Sir/madam, It`s so very important information for us .Thank you so much..

S.Kumar: Hi, I have export to USA and our party has transferred some amount through Western union, some through remitly and through JP Morgan cash bank ,and we have received the amount directly in our account in Indian rupee. while submitted export documents for realization our bank asking for FIRC/NOC for this, so can anyone tell us what to do because no one of the said financial institutions provide any FIRC/NOC will our documents be not realised? and will we have to return DBK received against this export? Pls. Suggest!

Amit gulati: I have chinese company i send 1 container to india company.he paid me 30% before production. After that i send to container to india. I shocked he released the container without hbl copy. Also the supplier already get the container. Now he dont pay me balance 70%. Now please tell me....can i sue my china agent or india agent or india customer. What can i do.

S,B,K,Sharma: Dear Sir, Recently, I sent a shipment to UK on open delivery, payment fifteen days DP. Documents consigned to the customer. FOB/AIR. Embarrassing, he is not a position to clear the cargo from the CNF agent in spite we lost four weeks expensive time. His telephonic discussion and mails are erratic. Please advise how to handle this issue. Best Regards Sharma, India

Razaq: Dear Sir, we are trying to clear working capital bank under one time settlement(OTS) scheme. Accordingly when we approached banker, banker told that "..there is a recovery amount is pending with ECGC and after clearing ECGC dues only we will sanction OTS ". In this regard I request to all to please enlighten me about what is ECGC recovery amount...? why Exporter have to pay ECGC recovery amount..? When exporter doesn't have any direct dealings with ECGC, how exporter liable to pay amount dues...? what is the link between ECGC and exporter...? please give my some gyan about this... Thank you all in advance.

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