Trade financing method, instruments and systems

A trade finance method for financing the sale of a traded product supplied by a seller to a buyer physically removed from the seller, the method comprising:

• a) the buyer providing an event-activated prerelease first bill-of exchange to the seller or the seller's agent prior to release of the traded product from the seller's control wherein the event-activated first bill-of exchange:
• i) is drawn by the seller;
• ii) is payable to the seller's order by a financial institution and is non-negotiable when drawn;
• iii) is drawn on the buyer at the financial institution and is executed by the buyer to indicate the buyer's acceptance of the payment draft;
• iv) sets forth a payment draft activating event, the activating event being effective to render the draft negotiable and being selected from the group of events consisting of release of the traded product by the seller, delivery of the traded product to the buyer, availability of specified funds to the buyer, availability of the proceeds of an asset sale to the buyer, in the case of a manufactured traded product, progress of manufacture of the traded product to an agreed stage and of a future date certain, occurrence of the activating event being agreed by the buyer and seller as commencing the payment term;
• v) sets forth a payment term of specified duration, the payment term commencing with the date of occurrence of the activating event, the date of the activating event being a date occurring after execution of the payment draft by the buyer;
• and
• vi) orders a payment of a specified amount of money to be made within the payment term;
• and
• b) the seller releasing the traded product for delivery to the buyer;
• and
• c) the buyer executing a second bill-of-exchange, the second bill-of-exchange also satisfying the conditions of the first bill-of-exchange set forth in clauses a) i)–vi) hereinbefore, prior to receiving the traded product;
• wherein the first and second bills-of-exchange are mutually extinguishable, each bill being designated as being payable if the other bill-of-exchange remains unpaid.

A computer-assisted method of financing a sale of a product traded from a seller to a buyer, the method including computer generation of an event-activated prerelease latent first bill-of-exchange and a second bill-of-exchange and comprising:

• a) acceptance by the buyer of the first bill-of-exchange ordering payment for the traded product to be made by the buyer at a maturity date subsequent to the date of acceptance of the first bill-of-exchange wherein the first bill-of-exchange;
• i) is drawn by the seller;
• ii) is payable to the seller's order by a financial institution and is non-negotiable when drawn;
• iii) is drawn on the buyer at the financial institution and is executed by the buyer to indicate the buyer's acceptance of the payment draft;
• iv) sets forth a payment draft activating event, the activating event being effective to render the draft negotiable and being selected from the group of events consisting of release of the traded product by the seller, delivery of the traded product to the buyer, availability of specified funds to the buyer, availability of the proceeds of an asset sale to the buyer, in the case of a manufactured traded product, progress of manufacture of the traded product to an agreed stage and of a future date certain, occurrence of the activating event being agreed by the buyer and seller as commencing the payment term;
• v) sets forth a payment term of specified duration, the payment term commencing with the date of occurrence of the activating event, the date of the activating event being a date occurring after execution of the payment draft by the buyer;
• and
• vi) orders a payment of a specified amount of money to be made within the payment term;
• and
• b) delivery of the buyer-accepted first bill-of-exchange to the seller or the seller's agent;
• c) retention by the seller or the seller's agent of the buyer-accepted first bill-of-exchange as collateral for payment for the traded product;
• c) acceptance by the buyer of the second bill-of-exchange ordering payment for the traded product to be made at a maturity date no later than the maturity date of the first bill-of-exchange, wherein the first and second bills-of-exchange are interdependent in that each bill-of-exchange is payable only if the other bill-of-exchange is unpaid, and
• d) presentation of the second bill-of-exchange to the buyer or the buyer's agent to collect payment for the traded product.

A computer-assisted trade finance method for financing the sale of a traded product supplied by a seller to a buyer geographically removed from the seller, the method comprising:

• a) the seller making an offer to the buyer by providing to the buyer the following computer-generated documents:
• i) a pro-forma invoice indicating the identities of the buyer and the seller, the nature of the traded product and an agreed purchase price to be paid by the buyer to the seller for the traded product;
• and
• ii) an event-activated prerelease latent first bill-of-exchange payable to the seller's order and drawn on the buyer, the first bill-of-exchange ordering a payment, being payment for the traded product, to be made within a term commencing with a specified activating event intended by the buyer and the seller to occur subsequently to execution of the first bill-of-exchange by the buyer the activating event being effective to render the draft negotiable and being selected from the group of events consisting of release of the traded product by the seller, delivery of the traded product to the buyer, availability of specified funds to the buyer, availability of the proceeds of an asset sale to the buyer, in the case of a manufactured traded product, progress of manufacture of the traded product to an agreed stage and of a future date certain, occurrence of the activating event being agreed by the buyer and seller as commencing the payment term;
• and
• b) the buyer accepting the offer by executing and accepting both the pro-forma invoice and the first bill-of-exchange.

A computer-assisted method for trading a product between a seller and a buyer, the method comprising:

• a) said buyer executing a computer-generated pro-forma invoice having indicia indicative of the traded product;
• b) said buyer executing a computer-generated event-activated prerelease latent first bill-of-exchange having indicia indicating that the buyer, by acceptance of the first bill-of-exchange, is legally bound to pay for the traded product upon the happening of an activating event and indicating that the first bill-of-exchange:
• i) is drawn by the seller;
• ii) is payable to the seller's order by a financial institution and is non-negotiable when drawn;
• iii) is drawn on the buyer at the financial institution and is executed by the buyer to indicate the buyer's acceptance of the first bill-of-exchange;
• iv) sets forth the activating event, the activating event being effective to render the draft negotiable and being selected from the group of events consisting of release of the traded product by the seller, delivery of the traded product to the buyer, availability of specified funds to the buyer, availability of the proceeds of an asset sale to the buyer, in the case of a manufactured traded product, progress of manufacture of the traded product to an agreed stage and of a future date certain, occurrence of the activating event being agreed by the buyer and seller as commencing the payment term;
• v) sets forth a payment term of specified duration, the payment term commencing with the date of occurrence of the activating event, the date of the activating event being a date occurring after execution of the first of exchange by the buyer;
• and
• vi) orders a payment of a specified amount of money to be made within the payment term;
• c) said buyer sending to said seller said first bill-of-exchange;
• d) said buyer sending to said seller said pro-forma invoice;
• e) said seller notifying a financial institution of the receipt by said seller of said buyer-executed first bill-of-exchange and said buyer-executed pro-forma invoice;
• f) said financial institution transmitting to said seller a transaction approval;
• g) said seller causing said event to happen;
• h) said seller issuing:
• i) computer-generated invoice enabling the holder of said invoice to obtain said traded product;
• and
• ii) a computer-generated second bill-of-exchange having indicia indicating that the buyer, by acceptance of the second bill-of-exchange, is legally bound to pay for the traded product upon execution of said second bill-of-exchange;
• i) said second bill-of-exchange being presented to said buyer, and said buyer executing said second bill-of-exchange;
• j) said executed second bill-of-exchange being exchanged for said invoice whereby said invoice is in the possession of the buyer;
• k) said seller providing said first bill-of-exchange to said financial institution;
• and
• l) said financial institution issuing a banker's acceptance obligating said financial institution to pay said seller.

A computer-implemented method for electronically facilitating a trade transaction wherein a traded product is supplied by a seller to a buyer and wherein the buyer, the seller, a financial institution and a buyer's transaction interface are electronically connectable with a packeted electronic information transport system, the method comprising:

• a) said buyer electronically sending to said seller first packeted electronic information readable to provide an executed pro-forma invoice having information describing a commercial transaction between said buyer and said seller;
• b) said buyer electronically sending to said seller second packeted electronic information readable to provide an executed event-activated prerelease latent first bill-of-exchange having information purporting to legally bind said buyer upon the happening of an event, wherein the first bill-of-exchange;
• i) is drawn by the seller;
• ii) is payable to the seller's order by a financial institution and is non-negotiable when drawn;
• iii) is drawn on the buyer at the financial institution and is executed by the buyer to indicate the buyer's acceptance of the bill-of-exchange;
• iv) sets forth an activating event, the activating event being effective to render the bill-of-exchange negotiable and being selected from the group of events consisting of release of the traded product by the seller, delivery of the traded product to the buyer, availability of specified funds to the buyer, availability of the proceeds of an asset sale to the buyer, in the case of a manufactured traded product, progress of manufacture of the traded product to an agreed stage and of a future date certain, occurrence of the activating event being agreed by the buyer and seller as commencing the payment term;
• v) sets forth a payment term of specified duration, the payment term commencing with the date of occurrence of the activating event, the date of the activating event being a date occurring after execution of the first bill-of-exchange by the buyer;
• and
• vi) orders a payment of a specified amount of money to be made within the payment term;
• and
• c) said seller sending a packeted electronic notification to said financial institution regarding the sending of said first and second packeted electronic information;
• d) said financial institution transmitting to said seller a packeted electronic transaction approval;
• e) said seller causing said activating event to happen;
• f) said seller sending to said buyer:
• i) third packeted electronic information readable to provide an invoice enabling said buyer to obtain said traded product;
• and
• ii) fourth packeted electronic information readable to provide a second bill-of exchange which upon acceptance legally binds the buyer, said first and second bills-of-exchange being mutually extinguishable;
• g) said second bill-of-exchange contained in said fourth packeted electronic information being presented to said buyer and said buyer accepting the terms of said transaction information;
• h) said fourth packeted information being electronically updated to include information as to the acceptance of said second bill-of-exchange by said buyer and being sent in exchange for the invoice readable from said third packeted electronic information;
• i) said seller electronically transmitting said second packeted electronic information to said financial institution;
• and
• j) said financial institution transmitting fifth packeted electronic information readable to provide a document comprising an order to pay obligating said financial institution to pay said seller.