QINGDAO CHANGHAO INTERNATIONAL LOGISTICS CO., LTD.

International settlement refers to foreign exchange receipt and payment business through banks between the parties of two different countries, whether between individuals, units, enterprises or governments, arising from buying and selling of goods, supply of services,  transfer of funds, and international loans. Out-of-loan settlement often occurs in international trade to settle the creditor's rights and debts between buyers and sellers, which is called international trade settlement. It is based on the settlement of commodity trading and foreign exchange, also known as tangible trade settlement. Methods of international trade settlement are generally divided into: letter of credit settlement, remittance and collection settlement, bank guarantee, combination of various settlement methods, and so on.

Letter of credit settlement

Letter of credit (letter of credit) is a product of bank credit involved in the settlement of the international sale of goods. Its emergence not only solves the contradiction of mutual mistrust between buyers and sellers to a certain extent, but also enables both parties to obtain the convenience of bank financing in the process of using letters of credit to settle payments, thus promoting the development of international trade. Therefore, it is widely used in international trade, so that it has become a major way of settlement in today's international trade.
Letter of credit is a conditional payment promise made by a bank, that is, a written document issued by the bank as per the request and instructions of the applicant to the beneficiary a certain amount payed upon present of the prescribed documents within a certain period of time; or it is a guarantee that the bank is willing to undertake the beneficiary's bill of exchange on behalf of the applicant under the conditions of the specified amount, date and documents. It is a kind of bank credit and adopts the reverse exchange method.

Combination of remittance and bank guarantee or letter of credit

Combination of remittance and bank guarantee or letter of credit is often used for the settlement of complete sets of equipment, large machinery and large transportation carriers (aircraft, ships, etc.). For this kind of products, the transaction amount is large and the lead time is long, so the buyer is often required to pay part of the payment or deposit by remittance, while most of the rest is paid by installments or paid later in accordance with the provisions of the letter of credit or by letter of guarantee.

In the actual international trade activities, some manufacturers may not have US dollar accounts or the condition to pay and receive US dollar, but they also have foreign trade demand. Under such conditions, we (Changhao International Logistics) can be entrusted to facilitate the completion of foreign trade orders. Our company can act as an agent for foreign trade clients in receipt and payment of foreign exchange, US dollars and letters of credit.