International Payment Instruments. Gateway transaction. continued. Prepared by Dr Nguyen Minh Duc Prepared by Dr Nguyen Minh Duc 2009

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1 International Payment Instruments continued 1 Gateway transaction 2 3 1

5 13 Wire transfer 14 SWIFT Society For Worldwide Interbank Financial Telecommunications SWIFT code (BIC code, ISO9362) a standard format of Bank Identifier Codes approved by the International Organization for Standardization (ISO). Developed a De Facto international bank routing/identification system (BIC Bank IdentificationNumber) Member owned cooperative Based in Belgium 8,100 participants in 208 countries andterritories 15 5

6 SWIFT Bank-to-bank messaging network, not a payment system Used primarily/traditionally for international payment messages Maintains a shared worldwide data processing, a communication link and a common language for international financial transactions when transferring money between banks, particularly for international wire transfers, and also for the exchange of other messages between banks 2006 SWIFT allowed corporate direct access to network 16 SWIFT - example Deutsche Bank is an international bank, with its head office in Frankfurt, Germany. The SWIFT code for its primary office is DEUTDEFF: DEUT identifies Deutsche Bank DE is the country code for Germany FF is the code for Frankfurt Deutsche Bank may use an extended code of 11 digits and has assigned branches or processing areas individual extended codes. This allows the payment to be directed to a specific office. For example, DEUTDEFF500 would direct the payment to an office of Deutsche Bank in Bad Homburg. 17 SWIFT example Nedbank is a primarily South African bank, with its head office in Johannesburg. The SWIFT code for its primary office is NEDSZAJJ: NEDS identifies Nedbank ZA is the country code for South Africa JJ is the code for Johannesburg Nedbank has not implemented the extended code of 11 digits and all SWIFT transfers to its accounts are directed to the primary office for processing. Those transfer interfaces that require an 11 digit code would enter NEDSZAJJXXX. Wire transfer payments requires both SWIFT (BIC) and IBAN. Both must be correct or payment will be rejected. 18 6

banks 2006 SWIFT allowed corporate direct access to network 16 SWIFT - example Deutsche Bank is an international bank, with its head office in Frankfurt, Germany.

7 IBAN International Bank Account Number Structure example: DE First 2 positions ISO Country Code Position 3 & 4 Country Number Next slot Bank Identification Number Last positions customer account number 19 Bill of exchange Promissory notes 20 Bill of exchange No: For:... BILL OF EXCHANGE...,.xx/xx/200x At. (date) sight of this FIRST Bill of Exchange (Second of the same tenor and date being unpaid) pay to the order of...(beneficiary bank)... the sum of USD 42,629 (United States dollar forty two thousand six hundred twenty nine only). Drawn under Confirmed / irrevocable / without recourse L/C No dated/wired... Invoive No... dated / wired To Drawer 21 7

(date) sight of this FIRST Bill of Exchange (Second of the same tenor and date being unpaid) pay to the order of...(beneficiary bank).

8 Bill of exchange No: For:... BILL OF EXCHANGE...,.xx/xx/200x At. (date) sight of this SECOND Bill of Exchange (First of the same tenor and date being unpaid) pay to the order of...(beneficiary bank)... the sum of USD 42,629 (United States dollar forty two thousand six hundred twenty nine only).... Drawn under Confirmed / irrevocable / without recourse L/C No dated/wired... Invoive No... dated / wired To Drawer 22 Money number writing + USD 10, US Dollars ten thousand eight hundred and eightyonly. + USD 111, United states dollars one hundred eleven thousandone hundred and sixty five only + USD 244, United states dollars two hundred forty fourthousand five hundred forty three and centstwenty only + USD 8,092, United states dollars eight million ninety twothousand five hundred forty two and cents fiftyfive only. 23 At sight Payment maturity (due) At 90 days after sight At days after bill of lading date At 90 days after bill of exchangedate) 24 8

.. dated / wired To Drawer 22 Money number writing + USD 10,880.00 US Dollars ten thousand eight hundred and eightyonly. + USD 111,165.

9 Promissory note No: /2005 PROMISSORY NOTE Hochiminh City, 30 December 2004 For: USD 5, I promise to pay to...abc KFC Franchises Co... bearer on demand the sum of...five thousand only... Ms. Thi No (on behalf Vu Dai Enterprise) 25 Promissory note No: /2005 PROMISSORY NOTE Hochiminh City, 30 December 2004 For: USD 25, Three months after dagted, I promise to pay to...abc KFC Franchises Co... bearer on demand the sum of... twenty five thousand only... Mr. Chi Pheo (on behalf Lo Gach Enterprise) 26 9

Thi No (on behalf Vu Dai Enterprise) 25 Promissory note No:.

118 One hundred Eighteen

118 One hundred Eighteen 1 2 3 4 5 6 7 8 9 10 ten 11 Eleven 12 Twelve 13 Thirteen 14 Fourteen 15 Fifteen 16 Sixteen 17 Seventeen 18 Eighteen 19 Nineteen 20 Twenty 21 Twenty 22 Twenty 23 Twenty 24 Twenty 25 Twenty 26 Twenty 27