Procedures

When you are involved in importing into your country from a foreign country, you need to be familiar with key global trade market terms. In the import export glossary terms, there are two main categories, sales shipping terms and payment terms. Sales and shipping term defines how the goods importing from are logistically handled and how product liabilities are classified in the entire process of importing into your destination from the origin, i.e., Malaysia in this case.

On the other hand, payment terms define payment formats for the importing goods from Malaysia as well as when and how transactions are made in the process of importing from the origin to your destination on a contractual basis. All these global trade market terms will have legal biding. As importing and exporting involve product changing hands between two different parts of the world where banking financing and credit systems can be quite different, traditional domestic trade market terms such as pre-paid and cash on delivery are very difficult to enact.

To play, press and hold the enter key. To stop, release the enter key.

Preliminary Stage:

1. Please write to us a Letter of Intent (LOI) using your Official Company Letterhead explaining:

Who You Are
What your Monthly Requirement
What your Target Price
Where your Designated Port of Loading

2. Provide Together your Company Profile or any Related Website to increase our confident to deal with you.

3. If you're Not the Real End Buyer, please Sincerely Revealed to us your Brokering Structure or the Official Mandate Letter from the Real End Buyer that you represent.

Negotiation Stage:

1. After received the LOI from you, we will issue the SCO addressed to your company.

2. If agreed with our product specs and terms in our SCO, then Buyer should sent the following documents to us:

Irrevocable Confirmed Purchase Order (IPCO) addressed to us
Bank Reference Letter (not BCL) on bank (Reference is prepared on a Bank’s Letterhead). The reference shall reflect financial state (solvency status) of buyer indicating availability or sources of payment of the principal contract: at their own expense (sufficient for payment of not less than a volume of three months’ supply) or with bank’s financing.
Copies of the License, giving the Buyer right to work and trade of commodities in the territory of the country in which it comes.

3. We will issue Full Corporate Offer (FCO). Buyer should sign/seal FCO and send it back to us.

Closing Stage:

1. After Buyer signed the FCO and send it back, then Buyer sends Bank Comfort Letter (BCL) confirmation by SWIFT to Seller's Bank referring to issued ICPO.

2. Seller’s Bank sends SWIFT message to Buyer’s Bank of Seller being ready, willing and able to issue Proof of Product (POP) from Our Supplier within (6) Banking days and to provide Performance Bond (PB) after receiving BCL by SWIFT from Buyer’s Bank.

3. Seller issues electronic/draft version of the Sales & Purchase Agreement (SPA) Contract for the Buyer’s agreement. Then Seller/Buyer issues the copy of the SPA Contract with their Banks. Afrerwards the Seller’s Bank confirms via SWIFT the POP Documents.

4. The Buyer’s Bank issues non-operative financial instrument to the Seller’s Bank. Then Seller’s Bank issues the 1.5-2% Performance Bond (subject to financial instrument of the Buyer) which shall automatically operate the financial instrument.

5. The First Delivery is performed according to the agreed delivery schedule. Both, the Seller and the Buyer agreed upon the Delivery Schedule for subsequent month shipments.

*REMARKS: The above Payment Terms & Conditions are varies depend on the Commodities Type or Product Range and Quantity Needed. i.e. Proof of Product or Performance Bond are not required for palm oil products which delivery from FOB Malaysian Port in small quantities.

As a results, a series of standardized international trade market terms became available to protect the interests of both importing and exporting parties. Obviously, the risk for an importing party will be a security for the exporting party. Therefore, when you are importing from country A into county B, you will always have to negotiate with the exporters in country B to reach mutually agreeable trade terms.

Exporter:	Least Secure →	Less Secure →	More Secure →	Most Secure
Payment:	Open Account	Bills for Collection	Documentary Credit	Advance Payment
Importer:	Most Secure	← More Secure	← Less Secure	← Least Secure

Main Types of Money Transfer - Market Terms Glossary

market glossary terms importing from china importing into america swift SWIFT Inter-Bank Transfer - now firmly established as standard practice in importing from one nation into the other. The importing party will instruct their bank to make payment to any bank account specified by the exporting party. So it would be good practice for the exporter to include their account details on their invoice heads.

market glossary terms importing from china importing into america check Buyer's Check - unsatisfactory trade market terms of settlement for the exporter as it carries the risk of dishonor upon presentation as well as the added inconvenience of being slow to clear. There is also the very real danger of the check being lost in transit as well. A check is also unsatisfactory if it is in the currency of the buyer, as this will take longer to clear and will involve additional bank charges. Exporters only use this method if they have an established trading history with the importing party or in cases where the profit margin has been increased to offset cash flow problems anticipated by the delay in receiving payment.

market glossary terms importing from china importing into america bank draft Banker's Draft - this is arranged by the importing party who asks their bank to raise a draft on its corresponding bank in the exporting country. This term provides additional security to a buyer's check, but they can be costly to arrange.

market glossary terms importing from china importing into america money order International Money Orders - these are similar in nature to postal orders. They are pre-printed therefore cheaper to obtain than a Banker's Draft, although again there is the risk of loss in transit.