1. Payment on open account

According to the ICC model international sale contract, unless otherwise agreed by parties, the payment of the price and of any other sums due by the buyer to the seller shall be performed in 30 days from the date of invoice.

An open account transaction is a sale where the goods are shipped and delivered before payment is due, which is usually in 30 to 90 days. Obviously, this option is the most advantageous option to the importer in terms of cash flow and cost, but it is consequently the highest risk option for an exporter. Because of intense competition in export markets, foreign buyers often press exporters for open account terms since the extension of credit by the seller to the buyer is more common abroad. Therefore, exporters who are reluctant to extend credit may

lose a sale to their competitors. However, the exporter can offer competitive open account terms while substantially mitigating the risk of non-payment by using of one or more of the appropriate trade finance techniques, such as export credit insurance.

2. Advance payment

According to the ICC model international sale contract, the advance payment must be received by the Seller's bank in immediately available funds at least 30 days before the agreed date of delivery or the earliest date within the agreed delivery period. With cash-in-advance payment terms, the exporter can avoid credit risk because

payment is received before the ownership of the goods is transferred. Wire transfers and credit cards are the most commonly used cash-in-advance options available to exporters. However, requiring payment in advance is the least attractive option for the buyer, because it creates cash-flow problems. Foreign buyers are also concerned that the goods may not be sent if payment is made in advance. Thus, exporters who insist on this payment method as their sole manner of doing business may lose to competitors who offer more attractive payment

terms.

3. Escrow account

Is used in international commercial practice as an alternative to the letter of credit. A specific bank account in which money is held until a specified duty is performed — eg a document is signed or goods are delivered. In general legal terms, the escrow is somewhat equal to specific deposit — a contract, deed or other written agreement held until a specified duty is performed\act of keeping such documents (usually by a solicitor\lawyer, or another neutral party to the contract between businesses).

4. Documentary credit\ letter of credit

Documentary credit or letter of credit - аккредитив, документарный акредитив, a document issued by the bank of the buyer to the bank of the seller by which the seller will be able to obtain the money\price (usually under certain conditions). Such document is issued before actual price payment and delivery and confirms the payment capacity of the buyer, as L\C would not be issued normally by the banks without having collateral or other available funds of the buyer. Documentary letter of credit — a letter of credit to which a number of other documents such as bill of lading, an insurance certificate etc. have been joined by the exporter to obtain money from the bank.

5. Irrevocable letter of credit

A letter of credit that can only be cancelled with the consent of the person expecting payment.

6. International commercial rules applicable to issuance of letter of credits

The issuance of letter of credits in modern international practice are covered by the ICC rules — ICC Publications No 500, and No.600 (2007 revision), or ICC Uniform Customs and Practice for Documentary credits. These uniform rules are used by the banks internationally, and the reference to usage of these rules are usually made in the text of L\C itself.The mentioned rules define very important issues: 1- documentary credits are separate transactions from the sales and other contracts on which they may be based and the banks are in no way concerned with or bound by such contracts, even if reference is made in the documentary credit to suh contracts. Third parties or beneficiaries can in no case avail themselves\benefit from the contractual relationships existing between banks or between the applicant and the issuing bank. - this is the practical meaning of the doctrine of separability - the main contractual obligations are separate from the documentary credit ones.

7. Definition of documentary credit/standby letter of credit according to ICC rules

ICC rules define the notions of «documentary credit» or «standby letter of credit» as any arrangement between the bank (the Issuing bank), which acts at the request and on the instructions of customer (its client, in most cases buyer) — the Applicant, or on its own behalf,a) is to make a payment to or to the order of a third party (the Beneficiary) or is to accept and pay bills of exchange\drafts (векселя), drawn by the Beneficiary; or b)authorises another bank to effect such payment, or to accept and pay such bills of exchange\drafts,or c) authorises another bank to negotiate against stipulated documents, provided that the terms and conditions of the Credit are complied with.

8. Cash on delivery\collect on delivery - COD

A type of transaction in which payment for a good is made at the time of delivery. If the purchaser does not make payment when the good is delivered, then the good will be returned to the seller.Payment can be made by cash, certified check or money order, depending on what is stipulated in the shipping contract.This type of transaction is usually done through a shipping company and allows both the seller and the buyer of the product to minimize the risk of fraud or default. COD allows the purchaser to pay at the time of delivery instead of having to pay upfront. Payment is made to the shipping company, and the shipping company then relays the payment back to the seller.