How to make DA mode of payment safe

Posted on 08 April 2023 Category : Export

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

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

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Comments

HITESH KHANNA : On 04 June 2015 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: On 16 June 2016 You should take ECGC Policy to cover your risk against DA Payment terms.

Cs: On 24 October 2020 I want import any product according to grade and specification. Which is the safest way when we can inspect good and pay the payment. Who knows what's in container and if documents doesn't get release by seller

Trinity Export: On 31 August 2021 On September 2019 I have shipped a consignment of 6000 pairs GU0003 gloves to G-Tek SRL valued 6300 euros through air shipment. Before the shipment it was committed that payment will be made immediately after receiving the goods. Where as it has been two years and I haven't received a single penny from G-TEK SRL. Moreover in this course of time I have tried reaching you through different mediums but you have gone fully silent and have even blocked me in Whatsapp which is not expected from a business man of your level. Since this was my very first ship the different government organisations like Reserve Bank of India (RBI) , Export Import Association Of India, Enforcement department and many other government organisations are harassing me for your payment and I very well know that this is a very small amount for you but a life long future for me hence I would request you to clear the payment as soon as possible. The organizations are even forcing me to take legal action against you which I personally want to avoid as I want to do business with your organization in future. Now this is up-to your discretion about what you want to do with the payment. I would ask you to make the payment by this week or else I will have no options left rather than move ahead with our governments guidelines. Just for your kind information government of India has become very much strict and as days are passing by it is becoming difficult for me to hold on. I would like to declare to all the media houses and the legal organisations in these email that these men are complete frauds who have blocked me in all the mediams and has no intentions to pay my dues. I am attaching below their photographs with their contact number address and the invoice of the goods sent for your ready reference. All the media houses will be contacted tomorrow by the government of India foreign affairs office Italy about the publication of the news in your publications. Last weak was the very last chance given to them and no more compromise and opportunity will be exchanged infavour of them. All the legal authorities has already been notified previously and were waiting just for the confirmation from our Government's end. Mail copies of previous communications will be shared with the media houses and are already available with the Indian embassy. We have already requested to issue an arrest order against Mr. Marco Frasca for committing fraud against us. On Wed, 30 Jun 2021,wrote: On September 2019 I have shipped a consignment of 6000 pairs GU0003 gloves to G-Tek SRL valued 6300 euros through air shipment. Before the shipment it was committed that payment will be made immediately after receiving the goods. Where as it has been two years and I haven't received a single penny from G-TEK SRL. Moreover in this course of time I have tried reaching you through different mediums but you have gone fully silent and have even blocked me in Whatsapp which is not expected from a business man of your level. Since this was my very first ship the different government organisations like Reserve Bank of India (RBI) , Export Import Association Of India, Enforcement department and many other government organisations are harassing me for your payment and I very well know that this is a very small amount for you but a life long future for me hence I would request you to clear the payment as soon as possible. The organizations are even forcing me to take legal action against you which I personally want to avoid as I want to do business with your organization in future. Now this is up-to your discretion about what you want to do with the payment. I would ask you to make the payment by this week or else I will have no options left rather than move ahead with our governments guidelines. Just for your kind information government of India has become very much strict and as days are passing by it is becoming difficult for me to hold on. Since you are silent right after receiving the goods I have tried contacting others by tagging others in the email and if you had issues with that I am sorry for that. On Fri, Jun 25, 2021 Dear All It's been more than two years that I have shipped the consignment to you and not received a single penny from you against the shipment till date. Several calls and several mails has been sent but no response from your side till now. Mr. Gaetano has blocked my contacts in every medium and I am not able to trace him. It's high time that I shall file a legal complain against Mr. Gaetano at Interpol and other legal authorities in Europe and Even in Indian Embassy and this time be ready to face serious consequences. On Fri, Oct 18, 2019, I need a reply from you why my payment has not been made till date. On good faith I have sent goods to you and now after one month my payment has not been released. I have trusted you guys blindly and this is what you are giving in return. You have asked for credit note and I have given the same to you. Just tell me whether my payment will ever be made or not. Please tell what you guys really intend to do with me. On Wed 16 Oct, 2019 wrote: Sajal please wait for my action. October 16, 2019 4:44:10 PM If you still have to understand at what price the gloves (A Bit Small In Size) are to be sold then why did you tell us (on Thursday 10/10/2019) that the payment has been already released and after almost a week you are telling me you guys are still understanding the price. Why there is always a disparity between your word and the action. It is almost next to impossible to believe that a Grade A buyer like GTEK is taking more than one month to release a very small payment even after receiving a credit note. About the samples GTEK will receive them very shortly. On Wed 16 Oct, 2019, I will meet with Gaetano and make sure we resolve this. I need to understand which price we can sell the gloves (low quality) which u have sent. So please wait my action. Re: next shipment We like you to be our supplier but we need to be absolutely sure of the quality. So please send a samples of the new production to: It has been almost a month and the payment has not been done till today. Before the shipment we were promised payment within 7 days from the date of shipment. One week before we were told that a payment has been made which I think was never released. Please let me know whether a payment has been really made or not. On Thu 3 Oct, 2019, Please confirm whether the payment has been released or not. On Wed, Oct 2, 2019, Have you sent the payment yet? Please confirm. It has been already two days since I have give the credit note. i have done whatever you have said why aren't you releasing the payment now. On Mon, Sep 30, 2019 wrote: Marco I am giving you 35% credit note and but you send me 50% payment as I asked yesterday and the balance amount we will settle in the next shipment. The next shipment will be on my risk and if GTEK likes the gloves then they can give me further orders. I guarantee that you will praised by GTEK for the upcoming shipment. On Mon 30 Sep, 2019, wrote: Sajal please send credito note for half value and we Will make the payment, Il 29 set 2019 19:50, I have immense faith on you and that is why I have given you the responsibility for my son's future. As a brother I just request a favour from your end is that atleast release 50 % payment tomorrow. I promise if you make this payment then I will ship 50 cartons for GTEK completely on my risk and if GTEK doesn't like it then I will not ask for a single payment from you. Please help me get out of the situation. This is the time for the biggest festival for us and I have to clear all the payments and even have to pay bonus to the employees. So please help me to get out of the situation. That's an earnest request from a brother to his younger brother. Even bank has created immense pressure on me regarding the payment. So please help me out. On Sun, Sep 29, 2019, wrote: My whatsup is not working well. In relation with the gloves you have sent I don’t believe we can sell them and we have also paid the duties and transport. So please send the credit note for the entire value, what I can promise you is that we will pay you 60% of what we will be able to obtain (if) we are able to sell the gloves. I will not send a full report for the gloves because this should be too long, leather quality, size, thickness, I was embarrassed in from of the client and his staff.Before you ship the new 50 cartons we need to see samples, please send to: I cannot tell you the bad quality of the gloves you have sent but we will try to sell then anyway, no worries.Hope you can send the sample asap so we can check it and confirm you can ship. If sample is ok and also production is fine we can surely continue to buy with LC payment terms. 28 settembre 2019 13:56 Sajal this is perfect. Now what you need to do is: Wait for my confirmation and send samples for the new production. Samples should be sent to confirm to panfix and also to gtek. They will need to approve the samples now before we can ship.

How to make DA mode of payment safe

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