A Typical International Trade Transaction

French

importer

Bank

1 Importer obtains bank’s

promise to pay on importer’s

behalf

3 Exporter ships “to the bank,”

trusting bank’s promise to pay

American

exporter

2 Bank promises exporter

to pay on behalf of importer

5 Bank gives merchandise

to importer

4 Bank pays

exporter

6 Importer

pays bank