The Global Business Model(c) is a standardized method for buyers and sellers to conduct trade transactions via the Internet (online). It is supported by 24 document templates that comply with the new ICC eUCPv2.0 and eURCv1.0 guidelines for submitting transport documents for negotiation.
GBM32 GBMeV Global Business Model
The Global Business Model (GBM) Manual . . . Buyer & Seller
A standardized method for conducting business transactions between buyers and sellers worldwide. It includes a trade transaction process, a uniform code of business practices, a standard bilateral basic ordering agreement, model transaction documents and forms (templates), standard documentary trade credit terms and conditions, standard definitions of trade terms, standard field definitions, standard abbreviation definitions and standard business weights and measures. The Global Business Model is a linear procedure with which buyers and sellers can agree to use between themselves to provide a common system to their transactions. The Global Business Model manual is divided into The Buying Process and The Selling Process. All trade transactions can be structured to follow this linear process.
ITF Online Trade Transaction Management
GBM Document Flow Chart . . . For Buyer & Seller
ITF manages the trade transaction document flow from RFQ to PO and Payment for both the Buyer and the Seller. Each transaction is assigned a "Case" number and ITF coordinates this process online between the parties.
GBM199 BOA Basic Ordering Agreement
Basic Ordering Agreement (BOA) . . . Buyer & Seller
The BOA defines the terms & conditions agreed to between the Buyer and Seller. The BOA is specific as to names, addresses, mode of transport, banks used, terms and conditions of sale, shipping addresses, documents required for negotiation, Incoterm and agents used. The BOA is NOT specific as to prices, unit quantities and delivery dates; these are contained in the Purchase Orders, Packing Lists and Invoice
BM316 RFQ Request for Quote
Request For Quotation (QTO) . . . Buyer TO Seller
The buyer requests a quotation, or RFQ, from the seller for specific goods or services with a Request For Quotation. The request for quotation is provided for the potential purchase of specific items, quantities, deliveries, ports of loading and unloading, and whether freight is included or not in the price.
GBM318 QTO Quotation
Quotation (QTO) . . . Seller TO Buyer
The response to a Request for Quotation, is the seller’s Quotation, or QTO. The Quotation is specific in response to the RFQ as to prices, discounts, freight charges, payment method, and the terms and conditions of sale. The Quotation has specific prices and terms and conditions for the validity period of the quote. If the buyer does not place a Purchase Order within the validity of the Quotation, the seller is not obligated to honor the quoted prices and terms.
GBM321 POR Purchase Order
Purchase Order (POR) . . . Buyer TO Seller
The buyer commits to the purchase of goods from the seller with the Purchase Order. The Purchase Order is the buyer’s contract for the purchase of goods from the seller. The Purchase Order contains the price, delivery and terms and conditions for a specific purchase. It is based on the Quotation earlier provided by the seller.
GBM322 POA Purchase Order Acknowledgement
Purchase Order Acknowledgement (POA) . . . Seller TO Buyer
The buyer receives the seller’s Purchase Order Acknowledgement accepting the purchase order. Any deviations or changes to the purchase order are stipulated at this time prior to the buyer committing funds to escrow. The quantities and shipping dates must be within the advised terms and conditions of the purchase order, or it must be renegotiated.
GBM323 PIV Proforma Invoice
Proforma Invoice (PIV) . . . Seller TO Buyer
The Proforma Invoice is drafted by the seller and is used by the buyer to arrange for the amount of payment to the seller by documentary trade credit. The Proforma Invoice is the seller’s estimate of the charges that will be invoiced to the buyer against the Purchase Order. The Purchase Order only contains the prices the buyer intends to pay for the goods; it does not reflect the amount of the remittance that the seller is going to request in the commercial invoice to fill the order and cover all of his freight, insurance, transaction fees and cost of money. The seller’s Proforma Invoice states the value of goods that are going to be shipped and calculates the cost of shipping and insurance that will be charged to the buyer and needs to be included in the buyer’s documentary trade credit.
GBM328 TPI Documentary Trade Payment Instructions
Documentary Trade Payment Instructions (TPI) . . . Seller TO Buyer
The seller’s Documentary Trade Payment terms and conditions are put into the Documentary Trade Payment Instructions. These instructions contain the seller’s company’s name and location, sight or usance payment terms, and documents that can be produced to evidence shipment. These instructions are used by the buyer to complete his Documentary Trade Payment Application for ITF to issue the trade payment.
GBM192 APP Documentary Trade Payment Application
Documentary Trade Payment Application (APP) . . . Buyer TO ITF Member Services
The buyer applies for the Documentary Trade Payment from ITF with the Documentary Trade Payment Application. The buyer uses the seller’s Documentary Trade Payment Instructions and the seller’s Proforma Invoice to prepare the application. This application reflects the committed currency, the sales terms and conditions, ports of loading and unloading, and the Incoterm agreed to in the Proforma Invoice from the seller.
GBM201 Documentary Trade PaymentDocumentary Trade Payment (DTP) . . . ITF Member Services TO Seller
The Documentary Trade Payment is an alternative trade finance substitute for a commercial banks documentary collection. The Documentary Trade Payment is issued and negotiated by ITF under the same UCP guidelines as the Documentary Trade Credit; except the funds supporting the instrument are available with the buyer instead of with a third party in escrow. Documentary Trade Payment negotiation is done using electronic documents in PDF instead of couriered hard copies required by commercial banks.
The average time to pay the exporter is four days. The cost to the importer for issuing a Documentary Trade Payment is a fraction of the cost of a bank collection. The cost to the exporter is zero and is carried by the importer’s issuing fee. The transaction is clarified by a face to face meeting between the parties via video conferencing. Fund transfers in and out are done by traditional SWIFT bank to bank wire transfer or a payment service. The Documentary Trade Payment offers global businesses the future of collection settlement over the Internet.
GBM326 TCI Documentary Trade Credit Instructions
Documentary Trade Credit Instructions (TCI) . . . Seller TO Buyer
The seller’s documentary trade credit terms and conditions are put into the Documentary Trade Credit Instructions. These instructions contain the escrow company’s name and location (Manx Escrow Services Limited, IOM), the drawee for drafts, sight or usance payment terms, documents that can be produced to evidence shipment. These instructions are used by the buyer to complete his Documentary Trade Credit Application for ITF to issue the trade credit.
GBM190 APC Documentary Trade Credit Application
Documentary Trade Credit Application (APC) . . . Buyer TO ITF Member Services
The buyer applies for the Documentary Trade Credit from ITF with the Documentary Trade Credit Application. The buyer uses the seller’s Documentary Trade Credit Instructions and the seller’s Proforma Invoice to prepare the application. This application reflects the committed currency, the sales terms and conditions, ports of loading and unloading, and the Incoterm agreed to in the Proforma Invoice from the seller.
GBM200 Documentary Trade Credit
Documentary Trade Credit (DTC) . . . ITF Member Services TO Seller
The Documentary Trade Credit is a trade finance substitute for a commercial, bank-issued international documentary letter of credit. The Documentary Trade Credit is issued and negotiated by ITF instead of a commercial bank.
The Documentary Trade Credit is issued and negotiated by ITF. The funds supporting and reimbursing the Documentary Trade Credit are housed with an internationally-recognized escrow company instead of a commercial bank. The documentary requirements and rules for reimbursement conveyed by a Documentary Trade Credit are similar to a bank issued letter of credit under the UCP. The Documentary Trade Credit offers similar functionality for usance, assignment of proceeds, and transfer. The Documentary Trade Credit is issued for self-liquidating trade transactions, but not for standby credits. The funds supporting the Documentary Trade Credit in escrow are used to buy the exporter’s electronic bill of lading, invoice, packing list and supporting documents.
Documentary Trade Credit negotiation with the escrow company is achieved using electronic documents in PDF instead of hard copies delivered by couriers, as required by commercial banks. The savings to the exporter from using the electronic transfer of documents and an escrow company is that the transfer of funds is made in an average of four days, instead of the average of twenty-four days for a bank-issued credit The cost to the importer for issuing a Documentary Trade Credit is a fraction of the cost of a commercial bank-issued credit. The cost for the transaction to the exporter is zero, as it is born by the importer’s issuing and escrow fees. The transaction is clarified by a face to face meeting between the parties via video conferencing. Fund transfers in and out are done by traditional SWIFT bank-to-bank wire transfers, or an online payment service. A Documentary Trade Credit transaction is eight times faster than, costs a fraction of, and requires half the cash flow needed to support a traditional bank-issued letter of credit transaction
The Documentary Trade Credit offers global businesses the future of credit settlement over the Internet.
GBM202 AMD DTC / DTP Amendment Application
Documentary Trade Credit or Documentary Trade Payment Amendment (AMD) . . . Buyer TO ITF Member services
The documentary trade credit may be amended with the agreement of both the applicant and beneficiary. The application for Amendment is to be initiated by the buyer at the request of the seller. Since the Documentary Trade Credit is “irrevocable” until it expires, the seller may accept or not accept the final amendment.
GBM204 TDC Transfer of Documentary Trade Credit
Documentary Trade Credit Transfer to a 2nd Beneficiary (TDC). . . Seller TO ITF Member Services
Under the UCP Articles a beneficiary to a documentary trade credit may transfer the credit to a 2nd beneficiary if the credit so allows. The 2nd beneficiary must have completed the KYC/AML requirements and have been issued with a ITF membership number. The 2nd beneficiary becomes the shipper of record and is entitled to the proceeds of the credit. However, UCP guidelines allow for the 1st beneficiary to substitute his invoice for the 2nd beneficiary’s for a higher amount; thus receiving his margin on the transaction. The transfer of a Documentary Trade Credit to a 2nd beneficiary requires that the terms and conditions of the master credit are acceptable to the 2nd beneficiary; only the amount and shipping dates are allowed to change in the 2nd issued credit.
GBM206 AOP Assignment of Proceeds
Documentary Trade Credit Assignment of Proceeds (AOP) . . . Seller TO ITF Member Services
The beneficiary to a documentary trade credit may assign the proceeds due to a third party in whole or in part. The assignee(s) must have completed the KYC/AML and be members of the ITF community the same as the beneficiary. An assignment of proceeds can be put in place by the beneficiary at any time prior to the Documentary Trade Credit’s negotiation and payment. The assignment of proceeds is paid at the same time as the beneficiary and can be used to pay a supplier, the freight forwarder or a commissioned representative. No agreement or concurrence is needed from the buyer for the seller to assign all or a portion of the proceeds due him to a third party. Multiple third parties can be accommodated as long as the total does not exceed the value of the of the proceeds. ITF will issue the assignment to the assignee based on the acceptance of the Assignment of Proceeds application from the beneficiary. ITF is under no obligation to issue an assignment if the request is to a non-member or an entity who has failed to pass the KYC/AML investigation. The assignment of proceeds may be a percentage of proceeds, a fixed amount or at a rate per unit.
GBM340 SLI Shippers Letter of Instruction
Shipper’s Letter of Instructions (SLI) . . . Seller TO Logistics Company
The Shipper’s Letter of Instructions is the logistics company that will be contracted to arrange transportation of the goods from the seller to the buyer, i.e., from the beneficiary to the applicant. The SLI may also request the logistics company to prepare the negotiable document set.
GBM334 PKL Packing List
Packing List (PKL) . . . Seller TO Buyer
The Packing List is the list of exactly what makes up the discrete shipment to the buyer. It may or may not reflect the instructions of the Shipping Order, depending on what is physically included in the shipment. The Packing List is a source document that is used to construct the Commercial Invoice and is usually a required document in any credit.
GBM330 INV Invoice
Invoice (INV) . . . Seller TO Buyer
The commercial Invoice is the formal statement to the buyer for requesting payment. The Commercial Invoice, or Invoice, uses the buyer’s Purchase Order and the seller’s Packing List as its authority to demand payment. The Invoice is also used by exporting regulatory authorities as the source document for obtaining Certificates of Origin. It can be used for determining shipment value for generating Certificates of Insurance. The Invoice is also used by the importing country for assessing import duties and tariffs.
GBM335 TBE Trade Bill of Exchange
Trade Bill of Exchange or Trade Draft (TBE) . . . Seller TO Buyer
The Trade Bill of Exchange is prepared by the beneficiary and submitted with the negotiable document set in conjunction with the required documents for negotiation and payment. The Trade Bill of Exchange is a demand for payment under the numbered Documentary Trade Credit or Payment. It also specifies when the funds are to be sent.
GBM337 COO Certificate of Origin
Certificate of Origin (COO) . . . Seller TO Buyer
The Certificate of Origin is required by many countries for clearing goods from customs at destination. Credits often require the Certificate of Origin as part of the negotiable document set. The Certificate of Origin is completed by the seller, and made official by a local Chamber of Commerce or trade association.
GBM338 NOC Notice of Completeness
Notice of Completeness (NOC) . . . Seller TO Buyer
The Notice of Completeness is the cover letter from the beneficiary or his agent conveying the negotiable documents to the negotiating entity, ITF. The Notice of Completeness stipulates what documents are included in a Negotiable Document Set and the method of payment. The Notice of Completeness is a required document under eUCP guidelines.
GBM208 EXR Examination Report
Examination Report (EXR) . . . ITF Member Services
The beneficiary to the subject DTC/DTP has submitted the negotiable documents called for in the subject DTC/DTP representing movement, value, content and/or quality of the purchased goods and services. The documents have been examined by negotiations which has found:
(1) ____ YES. The documents CONFORM to the Documentary Trade Credit/Payment requirements.
Per the terms and conditions of the escrow agreement entered into supporting this Documentary Trade Credit/Payment, the Beneficiary of the DTC/P will be requested to be reimbursed; and the documents representing title will be released to the Applicant named in the DTC/P.
(2) ____ NO. The documents DO NOT CONFORM to the Documentary Trade Credit/Payment.