Purpose and Use:
Drafts are widely used as instruments for payment in international trade.  As negotiable instruments, they must be signed by the drawer, be payable on demand (at sight), contain an unconditional order to pay a specified amount of money, and be endorsed either to the drawer or the drawer’s bank.

Regulatory Facts:

• Unz Stock No.:   W20-015

Common Errors to Avoid:

• Drafts do not specify either “at sight” or “time.”
• Currency of collection is not specific.
• Letter of credit required documents not same as specified on transmittal letter.
• Not specifically endorsed either to drawer’s bank or drawer.

Price:

Draft Transmittal Letter
CAT. No.	Description
W20-015	4-part snap sets

Purpose and Use:
Sight drafts require that the amount stated be paid by the drawer before shipping documents related to the transaction are released.  A draft drawn on and accepted by a bank results in a Banker’s Acceptance.

In some instances, the merchandise can be turned over to the buyer before payment, under a Trade Acceptance. A factor to consider with a Trade Acceptance is that the exporter is exposed to more risk than with a Sight Draft because the buyer has already received the goods. 

Regulatory Facts:

• Unz Stock No.: W20-030, W20-075

Common Errors to Avoid:

• Make sure that the currency of settlement of the draft is the same as the sales contract specifies. 

Price:

Sight Draft
W20-030	Bond sheets
W20-075	4-part snap sets

Purpose and Use:
With a Time Draft, the drawer releases the shipping papers to the drawee who in turn, agrees to pay the amount stated on the draft within a specified period of time. A draft that is drawn on and accepted by a bank results in the creation of a Banker's Acceptance. In some instances, the merchandise can be turned over to the buyer before payment, under a Trade Acceptance. A factor to consider with Trade Acceptance is that the exporter is exposed to more risk than with a Sight Draft because the buyer has already received the goods.

Regulatory Facts:

• Unz Stock No.: W20-010

Pricing:

Time Draft
W20-010	Bond sheets