Barter transaction-What is a barter trade ?
Barter is defined as a replacement, based on the equivalent value of exports of goods and import goods directly to combine methods of trading.
The traditional barter trade, each buyer and seller is generally the equivalent exchange of goods, does not involve payment of money, and no third party intervention, barter, including the exchange of the two sides to sign a contract to cover the goods into the matter to be determined. In international trade, the use of more outside the letter of credit by way of barter, that is, the two sides first set barter trade contracts, the provisions of the agreed price of their exports according to the letter of credit payments. The letter of credit opened with the first received approval to open out the other side or the base equivalent of the letter of credit equivalent to the entry into force. In addition, the inter-State settlement agreement entered into barter actually expanded the way of easy credit. According to the agreement, any party imports or exports, from both sides has the value of the designated bank account, in the period of time with each other to offset the settlement, the difference between gross and some of its provisions carried over the next year, and some provisions to pay cash more than the agreed amount of swing part of the difference.
Barter trade - the characteristics of barter trade Barter more flexible in practice, for example: at the time of delivery, you can import and export transactions at the same time, they can have a prior post; in payment methods, the available cash to pay, you can also account for billing, from the account offset each other; in transaction object, import the object can be a person, while the export of the object is designated by the importer to another person.
Barter trade - the two forms of barter trade
1. Direct barter Direct barter is also known as a general barter. From a strictly legal sense, means to barter barter. This direct barter form, often require the same time, import and export transactions, a deal is generally a sign of mutual satisfaction to both parties and the delivery of goods contracts, but does not involve a third party. It is the most common is currently the most widely used form of barter. For the delivery of goods through the transport of parties to transactions, because such barter form of general requirements for import and export at the same time, so there are difficulties in the application. So in actual operations, it generated a number of alternative approaches, the most common way of letter of credit shall be carried out through barter trade off. In the use of barter off letters of credit, the transaction before the two sides signed a barter contract, the two sides agreed to mutual commitment to each other in a certain time to buy a certain number of goods, their exports of goods by the agreed currencies, the total amount of the same or basically the same, paid off by the opening of letter of credit settlement mode, that is, both to each other as the beneficiary, the amount of opening letters of credit equal or nearly equal. As the delivery of the time difference, the two sides time to open letters of credit also has first, after the first imports of the issuing of the side in order to enable the other party is also issuing the obligation to fulfill the general requirements in the letter of credit in accordance with the regulations of the card to the other side to open a letter of credit for the entry into force; or the provisions of the amount of the card can only be used as the other side opened back card use, as the other.
2. Integrated Barter Comprehensive barter used for billing or payment between the two countries under the (settlement) agreement transactions. By the two governments signed a payment under the agreement, both sides each other's bank accounts, the two sides presented their respective governments in a certain period (usually one year) available to the other types of goods, import and export amount of basically the same, by mutual consent signed Yi cargo protocol, and then book the relevant provisions under the agreement by the respective professional foreign trade import and export of a specific contract signed, respectively, for delivery. Merchandise exports, by the virtue of both banking and shipping documents for settlement in the other countries in the Bank account opened accounts, and then by the bank according to the agreed settlement period. It should be noted that the end of a certain period, the two accounts if there is balance, as long as does not exceed the rate agreed, known as the "swing amount", in principle, a surplus of the other party shall not be required to pay in their own currency, but only to the goods to offset that by adjusting the speed of delivery, or delivery of goods by the trade deficit be balanced by side.
