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Who are the players?

Several parties are typically involved in an International Trade transaction. In addition to the buyer and seller, your respective banks participate in the process to assist in forwarding and sometimes reviewing documents, issue letters of credit, and receive or remit payment as necessary. Other parties include the following:

Exporter (seller/beneficiary) – The party selling the goods to a foreign buyer. When a letter of credit is used, the exporter must comply with the terms and present the required documents to the buyer’s bank. This party is also called the beneficiary since it receives the benefits offered by the letter of credit.

Freight Forwarder – The company (other than a carrier) who, in the performance of contracts, transports property for the general public by employing the services of rail, water and other carriers. A freight forwarder typically offers pre-shipment, shipment and/or post-shipment services. If the seller does not use a freight forwarder, the transaction could have increased risk. However, depending on their level of expertise, the seller could potentially increase profits by eliminating a freight forwarder.

Steamship Company / Carrier – A steamship company receives merchandise from the exporter/shipper or freight forwarder and arranges for transport of the merchandise.

Customs House Broker – An acting agent for the importer. The broker receives the shipping documentation from the bank, clears the merchandise upon arrival and arranges for delivery of the goods to the importer.

Importer (buyer/applicant) – The company purchasing the goods from a foreign supplier. This party is responsible for paying for the merchandise. If a letter of credit is used, this party is also called the applicant since they apply for the letter of credit from their bank.

Contact our International Trade team at 888.461.1864 or international@nationalpenn.com.

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