Recommendation 17 PAYTERMS – ABBREVIATIONS FOR …

1 Quently used in international trade, which can be em-ployed when the contract of sale to which they relatemakes this appropriate;Recommends that the ABBREVIATIONS shown in the list of PAYTERMS be used in such the fifteenth session of the Working Party, representa-tives attended from:Austria; Belgium; Bulgaria; Canada; Czechoslovakia;Denmark; Finland; France; German Democratic Repub-lic; Germany, Federal Republic of; Hungary; Italy; Neth-erlands; Norway; Poland; Romania; Spain; Sweden;Switzerland; Turkey; Union of Soviet Socialist Repub-lics; United Kingdom of Great Britain and NorthernIreland; and United States of America. Representativesfrom Japan, Nigeria and Thailand participated underArticle 11 of the Commission s terms of following specialized agencies and otherintergovernmental and non-governmental organizationswere also represented:Intergovernmental Maritime Consultative Organization(IMCO); General Agreement on Tariffs and Trade(GATT); European Economic Community (EEC); Cus-toms Co-operation Council (CCC); international Cham-ber of Commerce (ICC); international Organization forStandardization (ISO); international Union of Railways(UIC); international Chamber of Shipping (ICS); Inter-national Civil Airports Association (ICAA).

2 And Interna-tional Railway Transport Committee (CIT). I. important part of a contract of sale is the condi-tions under which the buyer will extinguish his debt to theseller: the terms of payment. Lack of precision in termsof payment and different interpretations of such terms areknown to give rise to disputes between trade partners. Forthis reason the ECE Working Party on Facilitation ofInternational Trade Procedures, when discussing its ini-tial comprehensive programme of work in 1972, agreedthat there was a need for standardization in the field ofterms of payment and agreed to initiate work in this areaby preparing an inventory of and defining the mostcustomary terms relating to payments in internationaltrade.

3 Austria, Belgium and Romania, later joined byFrance, agreed to act as rapporteurs for the Working Party on Facilitation of international TradeProcedures, a subsidiary body of the United NationsEconomic Commission for Europe, included the follow-ing project in its first comprehensive programme of work: 024 Prepare an inventory of and define customaryterms relating to payments in international sales .In 1977, facilitation experts from Austria, Belgium andRomania later joined by a facilitation expert fromFrance initiated preparatory work for a draft recommen-dation concerning terms of payment. Their proposal waspresented to the twelfth session of the Working Party inSeptember 1980 and was adopted at that a result of consultations between the interested delega-tions and the secretariats of the Economic Commissionfor Europe (ECE) and the United Nations Commission onInternational Trade Law (UNCITRAL), which took placein 1981, a few drafting changes were made in the Recom-mendation.

4 These changes were endorsed by the WorkingParty at its fifteenth session in March 1982, and arereflected in the present that session, the Working Party requested the ECEsecretariat to make the necessary arrangements for bring-ing up to date the list of terms of payment when required to review the list in order to make the terms, theirdescriptions and ABBREVIATIONS compatible with any har-monized standard terms of payment in international tradethat might be developed under the auspices of a world-wideforum for international trade law, such as the UnitedNations Commission on international Trade Working Party on Facilitation of international TradeProcedures,Considering that the standardization of terms of paymentwill contribute to the simplification of international tradeprocedures;Noting that no world-wide international forum for tradelaw has yet established such terms of payment.

5 Draws attention to the PAYTERMS corresponding tothose conditions of payment which are the most fre- Recommendation adopted by the Working Party on Facilitationof international Trade Procedures, Geneva, March 1982 ECE/TRADE/142 [Edition ] PAYTERMS ABBREVIATIONS FORTERMS OF PAYMENTR ecommendation 17113 Recommendation 17 PAYTERMS ABBREVIATIONS for Terms of Payment114 Recommendation reason for this action was the continuous exten-sion of the use of the United Nations Layout Key for tradedocuments. The space for indicating terms of payment onthe Layout Key was limited, making the use of conciseexpressions essential. Another reason was that automaticdata processing for contracts of sales, orders, confirma-tion of orders, invoices, offers, etc.

6 Required a code forterms of payment and that the standardization of the mainterms would help in devising such a on the Recommendation was reached byconsensus. The delegation of the United States of Americastated, as mentioned in the Report of the twenty-secondsession of the relevant preparatory body the Group ofExperts on Automatic Data Processing and Coding that PAYTERMS would probably not be used by UnitedStates banks unless specifically requested by the parties toa after the adoption of the present Recommen-dation in 1980, the ECE secretariat was officially notifiedabout the content of General Assembly resolution 34/142giving wider responsibilities for the co-ordination ofwork in the field of international trade law to the UnitedNations Commission on international Trade Law(UNCITRAL) in Vienna.

7 Consultations between thesecretariats of the two Commissions and the rapporteursresulted in some minor changes in the text of the may, in the future, initiate work onterms of payment used in international trade in order toestablish standard terms whereby the conditions would bedescribed. Their use would result in harmonization ofinternational trade law through the development of stan-dardized trade practices. Should this occur, the WorkingParty on Facilitation of international Trade Proceduresmight decide to update the present Recommendation provides ABBREVIATIONS forcertain terms of payment, referred to as PAYTERMS ,for use in international trade transactions as FIELD OF PAYTERMS apply to commercial transac-tions relating to the provision of goods and/or the purpose of this Recommendation the follow-ing definitions apply:Terms of payment.

8 Requirements which must be fulfilledin order that a payment may be considered a valid meansof extinguishing the debt to which it relates, and normallyincluding statements regarding time-limit for payment,method of payment (whether or not involving a guaran-tee), the amount to be paid and the place where paymentshould be effected; it is understood that the terms do notprejudge the legal interpretation of these the purpose of the provisions set out under , the following expressions, defined in the ICCU niform Rules for Collections, apply:Collection: The handling by banks, on instructionsreceived, of documents as defined below, in order:(a)to obtain acceptance and/or, as the case may be,payment, or(b)to deliver commercial documents against accep-tance and/or, as the case may be, against payment,or(c)to deliver documents on other terms and documents: Bills of exchange, promissorynotes, cheques, payment receipts or other similar instru-ments used for obtaining the payment of documents.

9 Invoices, shipping documents,documents of title or other similar documents, or anyother documents whatsoever not being financial REFERENCESECE/FAL REC No. 7 Numerical representation of dates,time and periods of time ;ISO 2014-1976 Writing of calendar dates in all-numericform ;ECE/UNCTAD Trade Data Elements Directory(UNTDED);ICC Uniform Customs and Practice for DocumentaryCredits (UCP);ICC Uniform Rules for Collections (UCR).VI. EXPLANATION OF following symbols are used in connection withPAYTERMS: M represents month or months (mois); it may bereplaced by the symbols D or J which represent dayor days (jour/jours). aaaa represents calendar year (ann e), MM month(mois) of the year and DD (or JJ ) day (jour) of themonth, in descending order, represented in accordancewith international standard ISO 2014 and ECE/FALR ecommendation No.

10 ABBREVIATIONS for Terms of Payment115 Recommendation 17 n represents the number of M (nM) or the amount ofpercentage (n%).VII. LIST OF PAYTERMS Group 1 Documentary CreditsDocumentary credits are governed by the ICC UniformCustoms and Practice for Documentary : It belongs to the parties to agree on the documentsrequired under documentary documentary , period of time for paymentunspecified CREDOCThe debtor is to open an irrevocable unconfirmed docu-mentary credit. The period of time for payment , period of time for paymentstated CREDOC/nMThe debtor is to open an irrevocable unconfirmed docu-mentary credit which provides for payment at sight (0M)or at the end of the period of time indicated (1M, 2M, as extending from the date on which the docu-ments are presented).