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.
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
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The above information is a part of Import Export Training online
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