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

Other details on how to import export 

How to protect parties each other in triangular exports
 Switching documents in triangular Exports and imports
 Procedures and documentation on Triangular shipments
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 Difference between Purchase Order and Commercial Invoice
 Consignee in Invoice ‘To Order’
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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?

Rajesh Handa: Do we need form 15CA & 15 CB for payment transfer to supplier? Should we enter this sale in GST portal?

Baroda qpt: We are a heavy engineering manufacturing company in business since 2009. A substantial part of our sales comes from direct exports of our products as a ‘manufacturer-exporter’. We have a situation as follows: We supplied some equipment to an End User in Country A, against an order received from our customer in Country B. Now we have to supply some spares free of cost under warranty obligation. These spares are not made in India, they are proprietary items to be ordered on a supplier in Country C. If we bring them into India first, we will incur customs duty in India, then re-export to Country then re-export to end user in Country A, We placed an order on supplier in Country C, asked him to deliver direct to end user in Country A. We have to make payment to supplier now. We will not have any bill of entry for the goods in India. How do we make payment without violating FEMA? How do we close the loop?

kumareshan: Your website is great and thanks for sharing knowledge. I have a question in triangular shipment. Shipper - ABC India Buyer - ABC Korea ( Head Quarter of Indian Forwarding agent) Consignee/goods final receiver - ABC Indonesia. Forwarding Agent - India ( Buyer - ABC Korea is our Forwarding Head Quarter) I'm the Forwarding agent at INDIA, have to issue HBL, shipper as Buyer - ABC Korea ( is it allowed, if not allowed, I need to know the problems behind it.) My Head quarter( Buyer - ABC Korea) order India to issue to issue HBL with ABC Korea address in shipper column instead of switching at Korea. Pls assist me as soon as possible, your knowledge is highly appreciated. If any clarification pls let me know.

mohit: I am Mohit from Alair International, our company is in the business of trading of hydrocarbon products. We would like to discuss with you about our proposed triangulated merchant business and related shipping related queries. May I request you to kindly let me know a suitable time.

pramod: I have received an export order from a Dubai Firm in USD and they want us to ship the material to Mauritania Client who is the end user. I require some inputs from you on the same. Can you share your contact number pls ?

ziad: You have a very good informative site. I need specific information regarding a triangular shipment / export process for online orders. I'm starting a hand made soap business whereby I will sell in India through retail and internationally through distributors. At the same time, my daughter who resides in Canada wants to set up an online store in Canada and take orders internationally. Once a customer, e.g. in Switzerland places an order on her site, she will pass it on to us for shipment directly to the customer in Switzerland. We need to invoice daughter the price we have agreed for her, e.g. Rs. 80/bar. My daughter will sell to her customer at Rs. 120/bar, for which an invoice needs to accompany the shipment to Switzerland. How would we go about doing that? I wanted to talk to you directly but could not find a number anywhere on your site. If you don't mind, I would be grateful if you could send me a number to call you.

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