Ownership Change And Beneficiary Designation Instructions And Guidelines: Fill & Download for Free

FOREIGNERS BUYING PROPERTY IN MEXICOForeigners can own property anywhere in Mexico. Recent changes to Mexican laws now permit foreign ownership of Mexican Real Estate. The way the title of the property will be held will depend on its location. If the property is in the “Restricted Zone” it will have to be held with a Fideicomiso (Bank Trust). The Restricted Zone is defined as any property that lies within 100 KM of an international border or 50 KM from the coast. The international borders are the United States, Guatemala and Belize. A Fideicomiso is a bank trust that holds title to a property in the Restricted Zone with the foreigner as the beneficiary.What is a trustee? In México there are Banks which are authorized to open fiduciary accounts and conduct trust operations. The Trustee holds legal title to the real estate property during the term of the Mexican trust contract, and is also empowered with rights and powers necessary to achieve the objectives to the contractual agreement creating the Trust.What exactly is a Mexican Bank Trust? The Fideicomiso or Mexican Bank Trust is a mechanism that enables foreign persons or companies to purchase property in Mexico. The trust mechanism was created to allow foreign investors to participate in Mexico's rapidly expanding sectors, while exercising complete and legal control over their investments while complying with Mexico's investment laws.The trust is a property interest held by a Mexican bank. The purpose of the bank is to manage the property for the benefit of the owner of the trust. Real estate investment trusts enable foreign entities to invest in Mexico's coastal and border areas which were once restricted from foreign investment of any kind.Only Mexican banking institutions authorized and regulated under Mexican laws can serve as trustees. The beneficiary of the trust, the foreigner, retains the use and control of the property held in trust and makes the investment decisions with respect to the property. This can include the decision to transfer such property interest to another foreigner realizing all of the economic benefits that accompany equity ownership in Mexico's attractive coastal properties.Trusts are established for initial 50 year periods and can be renewed indefinitely for additional 50 year periods. The beneficiary may transfer or assign his beneficial interest to any person and keep the profits from the sale of the property subject to applicable tax laws and expenses for the sale. Property held under a trust can be passed on to future generations and the person to whom the bequest is made is not burdened with an inheritance tax.Fideicomisos are an easy and safe way for you to own property in Mexico. They are government sanctioned and offer strong protection. Potential investors are encouraged to contact us for assistance in setting up your Mexican bank trust.To get a Fideicomiso you or the seller must provide to the bank the following information:A) A copy of the real estate title or deed indicating the exact surface area and boundaries. B) A copy of a draft of the property. C) The name (s) of the beneficiary (ies), nationality, address and phone number. D) The agreed purchase price.Upon receiving the information and documents, the bank shall proceed to apply to the Mexican foreign affairs ministry, for the Trust Permit; once obtained at the Bank, they will proceed to execute and legalize the Mexican Trust Contract before a Mexican Notario. Notaries in México have far greater legal authority than those in the United States. The Mexican notary public is an attorney at law, who is authorized by the Government to give final formality to the title transfer process in his protocol Book. The resulting document taken from his protocol book is registered at the public registry of the properties, and it will give evidence of the title in the name of the buyer.As the Trust Beneficiary, you will have the use and possession of the property, that is, you may live on the land, undertake any alterations and improvements. You also have the capacity to instruct the Trustee on mortgaging the real estate, renting it, selling, transferring your beneficial interest to another person or corporation.If you sell the property to another foreigner, you may assign your beneficial interest to the new purchaser. This assignment of rights must be formalized before a Mexican Notario, prior to the payment of the federal and local taxes and fees that arise from the transfer of beneficial rights.You will have the obligation to pay the duties on the property such as annual property tax, condominium fees, maintenance fees, water, electricity, annual Trustee fee, etc.The fees which the Trust Division of the bank you chose to issue your Fideicomiso will vary. Here is an example of one bank’s fees.A) A one time charge for Trustee acceptance, $500.00 USD, payable upon the signing of the Mexican Trust Contract.B) A yearly fee of $500.00 USD for the handling and servicing of the Trust, payable in advance. This fee will be increased by the Trustee every two years, according to the United States inflation rate. Every year, on the anniversary date of the Trust, the Bank shall mail to your address the bill of the annual fee for keeping the property in Trust. All the Trust fees will incur the value added tax (IVA) and are subject to change.You can expect other expenses that the beneficiary must meet upon the celebration of the trust deed. You must pay out the fees, taxes and expenses that arise from the purchase as well as the formalization of the Trust deed before a Mexican Notario. Also, you will pay the cost of the permit that must be obtained from the Mexican foreign affairs ministry to acquire the property in Trust, and the recording of the Trust deed at the National Registry of Foreign Investments.The Beneficiary has the right to appoint a substitute Beneficiary who will receive all the rights and obligations that arise from the Mexican Trust contract, if the Beneficiary dies during the life of the Trust. With this designation of substitute Beneficiaries, your heirs will not need to follow any probate proceeding before the Mexican courts, which could take time and attorneys fees. They would only have to give notice to the bank of the deceased and show the death certificate and their identifications. Then, the bank will give instructions to a Mexican Notario as to the proper protocol of the documents and with the resulting deed registering them as the new owners (Beneficiaries) of the Trust property.AVOID THE MOST COMMON BUYING ERRORS IN MEXICOPurchasing property in Mexico can be a fulfilling and life changing event if you do it right. So many times we have seen naive foreigners coming to Mexico expecting to get an incredible deal on properties that could be called “too good to be true”. Well we have to say that yes, most deals down here are out of this world and at a great discount compared to the United States and Canada, but if it’s too good to be true it's probably not true. If someone is offering you an incredible deal on a property but is asking you to do the transaction outside of traditional methods and without a professional real estate agent, we would have to say to be cautious.Use a professionally trained Mexico Real Estate AgentDo your homework and find a professional real estate company with trained real estate agents. A professional real estate agent will know their area and know the value of the property. This can save you tens of thousands of dollars when it comes time to negotiate. Make sure your agent is confident and knowledgeable and has the ability to not onlyfind you what you are looking for but negotiate a great deal for you. Ask your agent if they have an office or are they working out of their house. If they ask to meet you at a restaurant or a coffee shop it might be because they don't have an office to conduct business from.Are they a member of the local real estate association and if so which one. This will guarantee that you will have the ability to file a complaint if something goes wrong. The local associations hold their members to certain standards, which are usually very similar to the United States’ National Association of Realtors guidelines.If you don’t speak Spanish, make sure you understand what your agent has translated for you. Sometimes communication can be difficult, so make sure your agent takes the time to explain everything to you. Do not let them tell you to trust them or use the famous words “THIS IS HOW WE DO IT IN MEXICO". Make sure you have a clear understanding and agree to the entire process.TitleMake sure the person you are dealing with is the actual owner of the property. You may be laughing that we wouldneed to say this but you would not believe how many times we have been approached by people that say they own the property but really are not on title. If they are not on the title and do not have a power of attorney you are dealing with the wrong person.EscrowUse escrow in all cases involving the re-sale of property! Even when purchasing new construction, escrow should be used. In certain cases some developments will require you to release funds immediately in order secure the property. In these cases you need to do your homework on the development and asses your level of risk. Many times a good real estate agent can help you save thousands because of their experience and history with the local development. Or there may be fund control which will release portions of your deposit according to certain benchmarks, in which case you should be informed and aware of this. All of this should be in a written sales contract and disclosed to you before you release any funds. Understand the terms of your escrow and if you have any questions ask your escrow officer to explain them to you.Sales ContractRead your contract!!! Understand the terms and conditions of the contract. If your contract is in Spanish and you need it translated ask to see if the development has an official translation or spend the money and get it translated.The best advice we can give you is to use professionals. Trying to save a few dollars here and a few dollars there by using inexperienced people in your transaction could cost you $10,000's if not more in the end. Think about this for asecond. You’re a foreigner buying property in a foreign country. Why would you want to take unnecessary risks?All real estate transactions anywhere in the world come with a level of risk. Just because you’re in Mexico it doesn’t mean you should leave your common sense at the border. You can have a safe secure transaction with reasonable expectations if you would take a little time and choose the right professionals for the right jobs.BUYING COASTAL PROPERTY IN MEXICO'S RESTRICTED ZONEMexican law prohibits foreigners from acquiring fee simple title to residential real estate in areas referred to as “restricted” zones. These restricted zones refer to any land located within 50 km (30 miles) of any coastline or 100 km (60 miles) from any of the three borders shared with other countries, namely the United States, Guatemala and Belize. Also included in this zone is the entire Baja Peninsula.To increase trade in the real estate industry recent changes to Mexican laws now permit foreign ownership of Mexican Real Estate. There are actually several ways a foreigner can legally purchase property and the best way for you will depend on your investment interest.The “Fideicomiso” or Mexican Bank Trust is a mechanism that enables foreign persons or companies to purchase property in Mexico. This trust mechanism was created to allow foreign investors to participate in Mexico's rapidly expanding real estate market, while exercising complete and legal control over their investments and complying with Mexico's laws.The trust owns the property and is held by a Mexican bank. The purpose of the trust is to hold the property for the benefit of the owner of the trust. Real estate investment trusts enable foreign entities and persons to invest in Mexico's coastal and border areas, which were once restricted from foreign investment of any kind.Only Mexican banking institutions authorized and regulated under Mexican laws can serve as trustees. The beneficiary of the trust, the foreigner, retains the use and control of the property held in trust and makes the investment decisions with respect to the property. This can include the decision to transfer such property interest to another foreigner realizing all of the economic benefits that accompany equity ownership in Mexico's attractive coastal properties.Trusts are established for an initial 50 year period and can be renewed for additional 50 year periods indefinitely. The beneficiary may transfer or assign his beneficial interest to any person and keep the profits from the sale of the property subject to applicable tax laws and expenses for the sale. Property held under a trust can be passed on to future generations and the person to whom the bequest is made is not burdened with an inheritance tax.Fideicomisos are an easy and safe way for you to own property in Mexico. They are government sanctioned and offer strong protection. Potential investors are encouraged to contact us for assistance in setting up your Mexican bank trust.As the Trust Beneficiary, you will have the use and possession of the property, that is, you may live on the land, undertake any alterations and improvements. You also have the capacity to instruct the Trustee on mortgaging the real estate, renting it, selling, transferring it in to your beneficial interest to another person or corporation.If you sell the property to another foreigner, you may assign your beneficial interest to the new purchaser. This assignment of rights must be formalized before a Mexican Notario, prior to the payment of the federal and local taxes and fees that arise from the transfer of beneficial rights. You will have the obligation to pay the duties on land, i.e.: Annual property tax, maintenance fees, water, electricity, annual Trustee fee, ETC.As an example of the cost of a Fideicomiso here is what one bank charges:A) $500.00 USD for the Trustee acceptance charge, payable upon the signing of the Mexican Trust Contract.B) $500.00 USD a year for the handling and servicing of the Trust, payable in advance. This fee will be increased by the Trustee every two years, according to the U.S.A. inflation rate. Every year, on the anniversary date of the Trust, the Bank shall mail to your address the bill of the annual fee for keeping the property in Trust. All the Trustee fees have the value added tax (IVA) and are subject to change.You must pay out the fees, taxes and expenses that arise from the purchase as well as the formalization of the Trust deed before a Mexican notary public. Also, you will pay the cost of the permit that must be obtained from the Mexican foreign affairs ministry (SRE) to acquire the property in Trust, and the recording of the Trust deed at the National Registry of Foreign Investments.The Trust Beneficiary has the right to appoint a substitute Beneficiary who will receive all the rights and obligations that arise from the Mexican Trust contract, if the Beneficiary dies during the life of the Trust. With the designation of substitute Beneficiary, your heirs will not need to follow any probate proceeding before the Mexican courts. They would only have to give notice to the bank and show the death certificate and their identifications. Then, the bank will give instructions to a Mexican notary public as to the proper protocol of the documents and with the resulting deed registering them as the new owners (Beneficiaries) of the Trust property.

the advent of the digital age, we now interact, create and conduct business online leaving a digital footprint that remains even after we die; there is now a growing popular cultural awareness of this and online start–ups have been quick to capitalise on our need to make for provision for our digital assets. Social platforms have allowed for Web memorialisation, emergence of new grieving practices and expansion of traditional mourning rituals, however, there are a number of issues related to digital assets and these online mourning practices. At present, there is no consensus as to how social media company policies on deceased user accounts are handled, an area that is further muddied by legal issues of ownership and privacy. Furthermore user interface design does not currently make provision for the death of users and the social processes around online mourning were found to be complex and at times damaging to the bereaved. The expansion of our digital lives, the end of ‘sequestered death’, new mourning practices and issues associated with these changes, have, this paper argues, expanded, changed, and irreversibly complicated our cultural understanding of death as mediated through the Internet and communication technologies.ContentsIntroductionThe digital afterlifeIssues to considerOur changed experienceConclusionIntroductionSince the advent of the Internet and computing technologies, our lives have become increasingly digitized. We interact with others and create and share media online within our social networks constructing a new type of identity (Helmond, 2009). Our bank accounts, digital photo repositories, Web sites and online social media accounts all exist separately to our physical selves; this results in a digital footprint that remains even after we die. There is a growing popular cultural awareness of the implications of these digital traces evidenced by numerous news articles and blog posts addressing the need to make provision for what happens to our digital assets after death. In addition, new mourning practices around Web memorialisation that allow for public expressions of grief and interaction with other mourners are being rapidly embraced by the bereaved.A number of issues relating to the ‘digital afterlife’ are only now coming to light. Providers of online services do not at present fully provide for the inevitable death of their users which can at times result in culturally dissonant experiences for the bereaved. Issues surrounding privacy and ownership of online content are complicated by the inflexible and disjointed company policies on what happens to deceased user accounts. Emerging online mourning practices can also have a ‘dark side’. RIP trolling and grief tourists can shock and disturb genuine mourners, and context collapse and a perceived need for impression management can cause some bereaved people to view a memorial profile as a burden.There is no cohesive assessment in the literature of how online memorialisation and grieving behaviours, together with the practical considerations for the dispensing of our digital assets, changes how we experience people’s death in the digital age. By investigating online grieving practices, deceased user account policies and their legal implications, and the issues around providing for and being a recipient of a digital legacy, this article will argue that a continuing digital afterlife has an impact on our mourning practices and our cultural understanding of death.The result of the digitization of our lives is that we have ‘largely removed the physical objects ... [and are] left ... with only the digital representations’ [1], and despite the fact that we may still possess the artifacts of photos and letters, for example, the very means of producing, experiencing and sharing them has been transformed. From a legal standpoint, it has now become imperative to accurately define our digital traces, otherwise know as ‘digital assets,’ in order to assist executors of deceased estates. Connor (2010) in his legal comment on digital assets attempts a definition, describing them as ‘any digital file on a person’s computer as well as online accounts and memberships’, including ‘digital photos, digital videos, music on iTunes ... e–mail accounts, profiles on social networking sites ... online digital photo accounts, online banking and credit card accounts, and websites or domain names owned by a person, and any online subscription accounts’ [2]. Carroll and Romano argue that these digital artifacts are part of a growing personal collection that contains enough information to retell the stories of our lives. Whether or not this is so, at the very least, our online practices unavoidably leave digital traces that will remain even after we die: our digital remains.Emerging news articles and blog posts discussing the implications of death and our digital remains indicates a growing cultural awareness of this relatively recent phenomenon. Emily Baxter (2013a) blogs about her 29–year–old brother killed whilst serving in Afghanistan. After the initial shock and adaptation to their loss, the family is now faced with ‘grappling’ with his digital estate including making decisions about his online memorial site and whether or not it should continue. Eisenberg (2013) writes in the New York Times of the importance of making provisions for our digital assets, outlining some of the services available, offering guidelines for management of online accounts and passwords and touching on the issues of privacy and ownership related to them. Kaleem’s (2013) Huffington Post article discusses a ‘growing range of online startups’ looking to help people manage their digital estates and also focuses on the benefits and drawbacks of these services through the lens of traditional funeral service providers and the clergy. These relatively recent articles represent a growing number addressing the themes of digital death, digital estate planning and a continuing digital presence after death, or a ‘digital afterlife’.In response to this growing cultural awareness of the digital afterlife, a number of corporations and Internet startups have established new forms of online digital legacy services. These mainly fall into two categories, asset maintenance and posthumous scheduling. Asset maintenance services exist to help people prepare for and manage their digital assets ‘providing similar choices to those currently available when addressing material possessions in a formal will’ [3]. Examples of these services are Legacy Locker, Everplans and Planned Departure that allow users to store usernames and passwords and bequeath digital assets to specified persons. Posthumous scheduling services, such as Dead Social and If I Die, offer the ability to posthumously schedule social media posts. Taking this one step further, Lives On offers to continue a deceased person’s Twitter account posting updates based on an algorithm on how they have used Twitter while living (Leaver, 2013). These digital legacy services are testament to the perceived value of our online interactions and of our digital presence and represent an attempt to exert some control over what becomes of these after we die.A unique aspect of the digital afterlife that is somewhat separate from digital estate planning is that of Web memorialisation. This can take the form of an online memorial site constructed after death such as ‘Web cemeteries’, or more recently the transformation of an online social media profile into a memorial profile, where the most prolific examples occur on Facebook. A number of authors have addressed the phenomenon of the Internet affording new ways of memorialisation and sharing of grief experiences. Gibson (2007) notes that the Internet has expanded the ways in which we access death imagery as well as facilitating communication and story telling about death and dying. The fact that we now have the ability to access more information and to interact with and communicate with online networks allows us to extend our engagement with death and mourning practices beyond the physical and local. Jones (2004) observes that the technology of the Internet has increased the ‘number of ways we have to maintain presence’ [4] which perhaps logically extends after death when that very presence persists. Roberts and Vidal (2000) carried out a study of Web memorial sites, otherwise known as Web cemeteries, and observed that ‘the bereaved are rapidly embracing this opportunity for remembering their dead’ [5] and are making use of the technology of the Internet in order to mark the ‘joy and loss that characterize human existence’ [6]. Through the use of computing technology and the Internet as a means to further express grief, the bereaved are extending their online practices of interacting online through social media networks and through the creating and sharing of data within those networks.Facebook memorials in particular have gained attention due to their popularity and emerging practices around their use. In 2009, Facebook acknowledged the limitations of its then current policies on deceased person’s profiles by allowing the bereaved the choice of either deleting or memorialising the profile, with memorialisation being the default option. By memorialising a profile it is changed so that contact information and status updates are removed. Also it no longer appears in interaction suggestions and only existing friends can search for and interact with the profile (Kelly, 2009). Because memorialized profiles are restricted in this way, users have turned to public memorial pages usually for high–profile deaths (Leaver, 2013). Both types of Facebook memorial spaces have become very popular. At the end of 2012, it was estimated that three million Facebook user profiles had become memorialized (Kaleem, 2012) which leads us to ask the question as to why this particular form of online mourning has been embraced.Church (2013) analysed a number of Facebook memorial profiles all of which create ‘an aesthetic identity gravescape whereupon future members of the community may come to observe traces of that presence’ [7]. He deduces that the affordances of both the Internet and Facebook in particular, allow people the unique experience of appearing to commune with the deceased person directly, and because they are doing so publicly they are also ‘strengthen[ing] the communal experience’ [8]. Brubaker, et al. (2013) have also addressed Facebook in particular as a site that allows for expansion of public mourning. They found that social networking sites (SNSs) like Facebook not only serve as ‘archives’ of the deceased but also serve as ‘social space[s] for the bereaved’ and that these new uses of SNS profiles has been largely ‘unanticipated’ [9]. By affording people the opportunity of paying their respects in a public way they are not only mourning the deceased person but also forging bonds with others who are also grieving.With the growing number of services designed to assist with digital estate planning, and the perceived benefits of being able to express grief and mourning through online memorialisation, a number of issues related to these practices are emerging. Problems of user interface design, privacy and ownership, user account company policies, and the sometimes-problematic social processes around mourning online are becoming apparent. Within the field of human–computer interactions (HCI) Massimi and Charise (2009) recognize that modern computing technologies are ‘are not yet designed to effectively acknowledge ... the inevitable death of their user’ [10]. The dominant discourse in HCI design refers to users as ‘static and eternal’ [11] and even ‘lifespan–oriented’ development models have still not addressed death explicitly as an end–of–life stage.Massimi, et al. (2011) also suggest that technology has the potential to complicate our experience of the death of others when, for example, the bereaved receive voice–mail messages from the deceased, or view the deceased person’s ‘likes’ on a Facebook feed. When the bereaved are faced with a deceased person’s personal computer they may feel obligated to begin the complicated task of sorting out which information is to be kept or discarded. Emily Baxter (2013b) writes about her mixed feelings of curiousity and reticence about accessing her deceased brother’s laptop. The family decided on allowing an acquaintance that did not know him to make decisions about the content he would have most likely preferred to keep private, while they freely accessed the rest. Massimi, et al. (2011) ask the question of whether there may be better tools designed to help people contextualise their digital information for different groups of potential future beneficiaries allowing them to bequeath this information in ‘more elegant and meaningful ways’ [12]. The emerging work in HCI seeks to address how to better design systems aligned with the concept of ‘thanatosensitivity’, that is a sensitivity to the issues surrounding death and dying. Future HCI design needs to focus on systems that support and respect the bereaved, shed light on how technology is being used at the end of life, and how information about deceased persons is presented or used.Another area of contention is the confused nature of privacy and legal ownership of digital assets and online user accounts. In Connor’s (2010) legal comment on digital assets and estate planning, he discusses what online service providers ‘are doing in regards to the accounts of their deceased patrons’ [13]. He cites an example of a court case involving a deceased Unites States Marine whose father wished to access his Yahoo e–mail account. Yahoo declined the father’s request on user privacy grounds but later the father was granted access by a Michigan court. At present, social media company policies on deceased person’s accounts are problematic. As previously discussed, since 2009, Facebook offer the bereaved a choice of memorialising a deceased person’s account (their ‘policy’ or preferred option) or deleting it completely. Memorialising the account requires submitting an online form including a link to an obituary or other form of ‘proof’ of death. Deleting the account completely involves submitting a birth and death certificate and legal proof of authority to administer the deceased person’s estate (Facebook, 2013) although of course if a bereaved person is privy to the deceased person’s log in details the process of deleting the account becomes much simpler. A memorialised Facebook profile can no longer be edited and no new connections can be made which Leaver (2013) explains is a shortcoming of Facebook’s policy. He argues that Facebook is a ‘platform for performing identities’ and as such ‘digital executors’ should perhaps have the ability to ‘clean up or otherwise edit the final, lasting profile of a deceased ... user’ [14]. Presently, however, there exists no formal process for curating a memorialized Facebook profile.In April 2013, Google launched their new ‘Inactive Account Manager’ designed to enable living users to designate what becomes of their Google accounts when they die. Users can designate a particular period of inactivity after which Google will attempt to contact the inactive user. If they receive no response, Google will then either delete the account and all its contents or distribute the account contents to up to 10 designated close contacts dependent on the previously stated wishes of the user (Google, 2013a; McCullough, 2013). However, if users have not set up their Inactive Account Manager preferences, bereaved family members must undergo a laborious process if they wish to gain access to a deceased person’s account including provision of a death certificate and other forms of verification. Even if they proceed with the application, Google offers no guarantee that the applicants will gain access to the account (Google, 2013b). Twitter’s policy is even more restrictive. They require a ‘person authorized to act’ for the deceased to provide a number of documents as well as a signed statement and a link to evidence that the user has died in order for Twitter to de–activate the account and there exists no policy for allowing bereaved family members to access it (Twitter, 2013). Google at present is the only social media and e–mail account provider willing to allow users to make nuanced decisions on how their account information will be handled after their death including bequeathing account access to a third party.Blogs are another type of online account where the issues of ownership, privacy and copyright become complex. Connor (2010) explains that when a blog account holder dies their blog content is vulnerable to theft and generally the only way to prevent this would be to remove the content. Of course, this is only possible if the deceased person’s family or the executor of their estate has access to the log in details, and by taking into consideration the deceased person’s wishes regarding whether or not they wish their blog to remain online [15]. Both WordPress and Blogger state in their policies that they would only release personal information including log in information if required by law to do so in the interests of protecting their user’s privacy. There is also the issue of who actually owns the content of the deceased person’s or indeed any person’s blog, with the Terms of Service of both WordPress and Blogger claiming the right to ‘do whatever they want with the posted content’ [16]. Even though a blogger may have intellectual property rights over the content of their blog, they still have no absolute control over how that content can be used; a situation exacerbated after death if no provision has been made for executors to access their blog account and carry out their instructions concerning the content.Clearly there is not yet a consensus on how Facebook, Google and other online account service providers handle deceased user accounts. Privacy is perhaps the most binding factor forming the basis of deceased user account policies, however, this concern may be misplaced. Connor (2010) makes the observation that ‘whilst the privacy of the account holder is often cited as a factor weighing against disclosure, privacy rights are generally considered to cease upon death’ [17]. From a legal standpoint, it can be argued that protecting the privacy of deceased users is not a legally valid concern. Bequeathing log in information to others after death allows for deceased user account policies to be largely circumvented, however, even if digital executors have access to online accounts, there are questions as to whether there exists a legal right to actually use the usernames and passwords and what form of ownership access to the accounts legally confers [18]. Additionally many online services merely grant users a license to access an online account that technically expires upon death leaving more questions about ownership of the content left behind after the user’s death.One such question raised by Hodgetts (2013) is: who gains the ‘custody of research’ when an academic researcher dies? There is no mandate by universities or funding bodies about who gains access to a deceased researcher’s data that may need interpretation or partly written research papers. This is simply an extension of the general ownership concerns complicating how a person adequately plans for bequeathing their digital and intellectual property. Issues of ownership of digital assets are complex and obscure and it is unclear who legally has the power and control over deceased user accounts and their content. Even if privacy is not a legal requirement after death one cannot help but to ask the question: do users necessarily want family members going through their e–mail messages and social media accounts after they have died?Another problematic area of concern around our digital remains is that of the social behaviours around Web memorial sites. Public Facebook memorial sites in particular are subject to ‘trolling’ activities in which people post abusive or offensive posts onto pages set up to memorialise a deceased person. Trolls may even go so far as to create fake mourning pages that attract genuine mourners, or even hate pages that openly mock the deceased, giving them control of the digital mourning space [19]. Phillips (2011) conducted an undercover investigation into ‘RIP trolling’ on Facebook when this activity peaked in 2010. She found that trolls use pseudonyms and are part of a networked culture identifiable by the pseudonyms they chose. Rather than an attack on the genuinely bereaved, Phillips found trolling activity to be more of an attack on the way the mainstream media glorify tragedy as well as those ‘grief tourists’ so tightly instep with the mainstream media’s hysterical reporting, and that the trolls and the media exist in ‘antipathetic symbiosis’ wherein the activities of one fuel those of the other [20]. Whatever their justifications for their activities, RIP trolls on Facebook are problematic and trolling activity causes ‘significant emotional damage’ [21]. Being confronted with disturbing, insensitive posts specifically designed to shock and offend can be a disturbing experience for anybody, more so for the bereaved.Whilst noting the unique affordances of Facebook in allowing for public grieving, Marwick and Ellison (2012) also observed that Facebook memorial sites often attract trolls and grief tourists. Another phenomenon they noted is that of ‘context collapse’ as it applies to memorial sites, wherein social media ‘friends’ and other online acquaintances of the deceased make comments even on private memorial profiles that sometimes come as a shock to family and close friends coming as they do from the diverse nature of the relationships they may have had with the deceased. This can also lead to ‘impression management’ by bereaved family and friends, who may feel burdened to uphold a particular impression of the deceased person by replying or commenting on offending posts resulting in the bereaved sometimes finding Facebook memorial pages to be difficult to manage and ‘insincere’ [22]. In some cases, family members have been locked out of memorial profiles unable to be ‘added’ to the account as a friend whilst at the same time the profiles have been filled with clichéd messages from the deceased person’s distant social connections [23].Problems associated with ‘online disinhibition’ as noted by Suler (2004) may play a part in the issues of trolling and context collapse as observed on Facebook and other online memorial sites. Suler’s psychological analysis of online behavior observes that people ‘self–disclose ... more ... intensely than they would in person’ [24] thus affording the kinds of interactions or comments that people would perhaps refrain from in face–to–face interactions. These issues with Facebook memorial pages and profiles again raise questions about power and ownership of our online content and even our identities. Who has the ‘right’ to manage what are appropriate posts and comments to make on a memorial profile for instance? Even the make up of what group of people constitutes ‘bereaved family and friends’ can at times be contentious in light of blended or estranged families or other complicated family structures.The impact of a continuing digital afterlife and the associated issues on our cultural understanding of death is particularly interesting. Gibson (2007) claims that because of our increased exposure to death imagery and storytelling about death, the modern era of ‘sequestered death’ [25], particularly within Western culture, is now passed. Furthermore, the bereaved can now mourn publicly on Web cemetery memorial sites and social media memorial profiles. Roberts and Vidal (2000) suggest that Web cemetery memorial sites for example represent opportunities for the bereaved that ‘are less available in classic post–death rituals’ [26] allowing them to be drawn into a new public space representing a ‘new form of post–death ritual’ [27]. The role of ritual is important in attributing meaning to death (Neimeyer, et al., 2002) and it can be argued that this expansion of mourning practices represents new forms of ritualized behavior concerning death that extend beyond traditional locally–based funereal practices.There are those that warn that these changes are not positive. In writing about the public outpouring of expressions of grief on Twitter over the death of Peaches Geldof, Brendan O’Neill notes how ‘ingrained in our culture ersatz grief has become’ [28]. The ease with which one can post a comment on social media may perhaps have diluted the sincerity of these public expressions of grief. In addition, the almost perpetual nature of online memorialisation means that the mourning process may never come to a natural end. Limits on mourning practices that may exist in some cultures cannot be readily controlled in an online environment and the public grieving of others may cause dissonant experiences for those whose religious beliefs require the end to public expressions of grief. Long (in Kaleem, 2013) cautions that ‘online services can never fully replace a long history of traditions around death’ [29] and that Americans have gone ‘“ritually astray” from powerful traditions around death’ [30] as they seek to find meaning in death online. Whether or not these concerns are valid, the bereaved are largely embracing these new forms of ritual and the opportunity to grieve publicly and connect with other mourners in addition to the local and physical connections afforded by traditional mourning practices.In an attempt to explain why online memorialisation is being embraced, Sherlock (2013) suggests that contemporary disenchantment with traditional religious and spiritual practices has left ‘many people with inadequate or unacceptable ways of understanding death and mourning’ [31]. Online memorialisation allows for a perception of ‘digital resurrection’ involving suspension of disbelief wherein the bereaved can continue a form of relationship with the deceased. Church (2013) and Odom, et al. (2010) agree that Web memorials allow mourners to connect not only with each other but also enable a form of continued communication with the deceased as mourners address posts and comments to them. Lingel (2013) observes that the ability for mourners to interact with a memorial profile allows for a ‘sense of continued presence’ of the deceased [32]. From a philosophical standpoint, it can be argued that these practices are beneficial to the bereaved. Attig (2004; 1991) summarizes current philosophical understandings of grief and mourning based on 30 years of research in the field. He posits that grieving is more than a passive activity of feeling the emotion of grief but that it is also an active process involving ‘finding a new way of relating to the one who died’ [33]. He suggests that whilst passionate grief in which the bereaved hopelessly longs for the deceased to come back to life leads to despair, an active grieving process which involves ‘maintaining relationships with the dead in some form’ [34] leads to healing and a new understanding of life for the bereaved. New mourning practices of interacting with a deceased person’s profile on memorial sites can assist mourners with this process, affording them a further outlet for relating to the deceased and thus expanding the process of their active grieving.Not all scholars agree that mourning practices have been largely changed due to the affordances of the Internet. Jones (2004) whilst admitting that it comes as no surprise that digital means of communication have ‘become a part of our culture’s rituals of death and dying’ asserts that there is nothing new about these practices that ‘print media cannot provide’ [35]. Jones’ observations however, were made before the advent of social media and may no longer be accurate. Although posts on memorial sites may resemble the traditional death notice in some respects, the sheer scale and global nature of Web memorialisation as afforded by social media, eclipses the limited and local nature of newspaper death notices. Furthermore posters of death notices have no ability to interact with and grieve with other mourners nor to revisit a perpetual and dynamic memorial in order to move forward within an active grieving process.Although mourning practices have been expanded through Web memorialisation and online grieving practices, it can be argued that our experience of the death of others has also been complicated by the digital afterlife. As ‘age old biological, social and cultural events concerning death are being newly mediated by contemporary technological contexts’ [36], the bereaved are being affected in largely unanticipated ways. As previously discussed, this can lead to disturbing experiences for the bereaved as they encounter persistent social media profiles of the deceased and often uncomfortable situations in which personal boundaries are violated amidst uncertainties around who is ‘entitled’ to identify themselves as bereaved (Massimi, et al., 2011). In addition, longstanding protocols of social hierarchy around communications about death are changed through social media networks. Metcalf and Huntington (1991) in their cross–cultural study of rituals surrounding death, describe the traditional social norms around who is first told about the death of family which are dependent on the level of intimacy with the deceased. In contrast, on social media networks, news of a death can be shared online without recourse to traditional social hierarchies, potentially complicating social interactions between the bereaved immediately after the death of the deceased.Our dealings with death are further complicated by the need to address our own digital legacies and how to effectively make provision for them. The lack of cohesiveness between online account deceased user policies together with the complexities of legal ownership of the contents of online accounts, means that at present users themselves need to be proactive in making plans to have their digital assets disposed of according to their wishes, especially if they are concerned about keeping details of their online activities private. This can be a somewhat laborious process requiring knowledge of the policies of different platforms. Even the common sense approach of leaving details of account usernames and passwords to digital estate executors is sometimes in breach of company user account policies (Bellamy, et al., 2013; Connor, 2010). Uniform laws that apply to all online deceased user account policies may go some way towards simplifying the issues surrounding digital legacies and may free companies from liability concerns that often underpin their sometimes inflexible approach to online account access (Hu, 2013). At present though the bequeathing of digital assets represents a further complication of the process of creating a will and planning for the dispensing of a deceased estate.Inheriting a digital legacy can also complicate the experience of the death of a loved one. How they receive a digital inheritance and the resultant issues around what to do with the digital assets that have been left to them can be daunting. The meaning derived from a digital inheritance is dependent upon the person receiving it: some find it fosters a feeling of connection with the deceased while for others their grieving process is complicated (Massimi and Baecker, 2010). In addition as technology progresses, digital assets and keepsakes of the deceased (for example data on a mobile phone or in an online account) may no longer be easily accessed and may require caretaking by the custodians of a digital estate in order for them to survive into the future (Jones, 2004). Clearly the mourning period for beneficiaries of digital legacies is complicated by the need to make decisions about how to best handle the digital assets left to them.It is clear that in the digital age, our cultural experience of death has changed in various ways. New ways of communicating online through social networks together with access to online news sources that amplify death imagery have brought an end to the modern era of sequestered death. Online mourning practices and web memorialisation have expanded traditional mourning practices and have been largely embraced, allowing for the formation of new rituals around death that extend beyond traditional locally–based rituals of funerals and wakes. Mourning rituals are changed and expanded not only in terms of how we grieve but also in scope due to the global scale of online mourning practices that is afforded by social networks and the architecture of the Internet.In addition to the expansion of mourning practices and grieving rituals, the emergent issues around social behaviours online, context collapse and privacy and ownership concerns serve to complicate our experience of death as it occurs around us. Culturally dissonant experiences for the bereaved may occur when they are confronted by shortcomings in the design of computing technology and online services to adequately address the death of their users. In addition, the need to make provision for bequeathing our digital assets as well as the problems associated with the receiving of a digital legacy from the deceased further complicates our experience, and at present there are no cohesive legal structures in place to simplify deceased user account policies. The future of digital estate management is only now being addressed and may benefit from uniform laws to simplify the process of bequeathing our digital assets and to release companies from liability concerns. Legal issues aside, it is clear that our cultural understanding of death as mediated through the Internet and communication technologies has been expanded, complicated and irreversible changed. End of articleThankyou. For readind so far 🙂🙂🙂🙏🙏🙏 Like the page if it was help full for your knowledge

It is not necessary to start manufacturing after negotiations, it can be done on stock and balances also.Settlement of Import Trade Transactions• Various trade terms are structured to balance the trade transaction risks for both the importer and exporter.• As an importer/ distributor you will wish to negotiate the most favorable terms of purchase with your overseas supplier.• You will negotiate terms of purchase to ensure that you receive your import purchase in the right quantity, right quality, at the right price and on time.• At the same time you can expect your overseas supplier to negotiate terms that will minimize potential risks - particularly the risk of non-payment.•Import trade transactions can be structured in a number of ways.• The structure used in a specific transaction reflects how well the participants know each other, the countries involved, and the competition in the market.The most common terms of purchase are as follows:1. Consignment Purchase2. Cash-in-Advance (Pre-Payment)3. Down Payment4. Open Account5. Documentary Collections6. Letters of Credit1. Consignment PurchaseIn a consignment purchase arrangement, the importer/distributor makes payment to the overseas supplier only after sales to end user is made and payment received. Consignment purchase terms can be the most advantageous to an importer/distributor. It is also considered the most risky term for the overseas supplier.2. Cash-in-Advance (Pre-Payment)Under these terms of purchase, the importer must send payment to the supplier prior to shipment of goods. The importer must trust that the supplier will ship the product on time and that the goods will be as advertised. Basically, Cash-in- advance terms place all of the risk with the importer/buyer. An Importer may find his seller requiring prepayment in the following circumstances:(1) The Importer has not been long established.(2) The Importer's credit status is doubtful, unsatisfactory and/or the country political and economic risks are very high.(3) The product is in heavy demand and the seller does not have to accommodate an Importer's financing request in order to sell the merchandise.There are advantages and disadvantages with Cash in Advance terms. This method of payment involves direct Buyer/Seller contact without commercial bank involvement and is therefore inexpensive. However, the Buyer faces a very high degree of payment risk while retaining little recourse against the Seller for poor quality goods or incorrect or incomplete documentation. In addition there is a possibility that an unscrupulous Seller may never deliver the goods even though the Buyer has made full prepayment. Although pre-payment terms eliminates virtually all risks to the seller these terms can place the seller at a competitive disadvantage.3. Down PaymentThe Buyer pays the Seller a portion of the cost of the goods "in advance" when the contract is signed or shortly thereafter. There are advantages and disadvantages of down payment terms. The down payment method induces the Seller to begin performance without the Buyer paying the full agreed price in advance. The disadvantage is that there is a possibility the Seller may never deliver the goods even though it has the Buyer's down payment. This option must be combined with one of the other options to cover the full cost of goods.4. Open AccountUnsecured Open Account terms allows the importer to make payments at some specific date in the future and without the buyer issuing any negotiable instrument evidencing his legal commitment to pay at the appointed time. These terms are most common when the importer/buyer has a strong credit history and is well-known to the seller. The buyer may also be able to demand open account sales when there are several sources from which to obtain the seller's product or when open account is the norm in the buyer's market. This mechanism offers the seller no protection in case of non-payment. However, an exporter can structure his open account sale transaction to minimize the risk of non-payment. For example, the exporter can reduce the repayment period and retain title to the goods until payment is made. Even then, it is difficult to enforce this especially if the goods have been either resold by the buyer or consumed in some other processing activity. Despite the dangers, open account terms with extended dating are becoming more common in international trade. Exporters that offer open account terms are increasingly obtaining credit insurance to mitigate the potential open account credit risks.There are many advantages and disadvantages of open account terms. Under an open account payment method, title to the goods usually passes from the Seller to the Buyer prior to payment and subjects the Seller to risk of default by the Buyer. Furthermore, there may be a time delay in payment, depending on how quickly documents are exchanged between Seller and Buyer. While this payment term involves the fewest restrictions and the lowest cost for the Buyer, it also presents the Seller with the highest degree of payment risk and is employed only between a Buyer and a Seller who have a long-term relationship involving a great level of mutual trust.5. Documentary CollectionsCollections terms offer an important bank payment mechanism that can serve the needs of both the exporter and importer. Under this arrangement, the sale transaction is settled by the bank through an exchange of documents, thus enabling simultaneous payment and transfer of title. The importer is not obliged to pay for goods prior to shipment and the exporter retains title to the goods until the importer either pays for the value of the draft upon presentation (sight draft) or accept to pay at a later date and time (term draft). The principal obligations of parties to a documentary collection arrangement are set out in the guidelines of the "Uniform Rules for Collection" (URC) drafted by the Paris- based International Chamber of Commerce.Role of Banks in Documentary CollectionsBanks play essential roles in transactions utilizing documentary collections as follows:Remitting Bank: This is the exporter's bank and acts as the exporter's agent in collecting payment from the importer. It basically transmits the exporter's instructions along with the terms of the draft to the importer's bank. The bank does not assume any risks and does not undertake to pay the exporter but can influence to obtain settlement of a bill.Collecting Bank: This is the importer's bank and takes up the role of ensuring that the buyer pays (or accept to pay) for the goods before shipping documents are released to him.Generally, the banks in the transaction control the flow and transfer of documents and regulate the timing of the transaction. They must ensure the safety of the documents in their possession but are not responsible for their validity and accuracy.Variations of Documentary CollectionsThis form of trade settlement comes in two forms - Documents against Payment and Documents against Acceptance. Each of these forms of collections may be either "clean" (financial document alone) or "documentary" (commercial documents with or without a financial document). A financial document is a check or a draft; a commercial document is a bill of lading or other shipping document. A clean collection involves dollar-denominated drafts and checks presented for collection to U.S. banks by their foreign correspondents. In a documentary collection, the exporter draws a draft or bill of exchange directly on the importer and presents this draft, with shipping documents attached, to the bank for collection.Cash against documents/Sight DraftsIn a transaction on documents against payment, the exporter releases the shipping documents to the importer only on payment for the goods. In this arrangement, the exporter retains title to goods on board and may decide to refuse their discharge if payments are not received. This arrangement which demands the buyer's immediate payment of the exporter relies on a sight draft drawn on the buyer.Document against Acceptance/Term DraftsAn exporter may decide to release shipping documents to a buyer on acceptance of the exporter's drafts. In this case, the importer is under an obligation to pay at a future date. This method satisfies both parties since the importer is able to receive the goods before payment and the exporter has a firm assurance (but no guarantee) that payment will come at a specified future date.Flow of Transaction in a Documentary Collections DealExporter/drawer and Importer/drawee agree on a sales contract, including payment to be made under a Documentary Collection.The Exporter ships the merchandise to the foreign buyer and receives in exchange the shipping documents.Immediately thereafter, the Exporter presents the shipping documents with detailed instructions for obtaining payment to his bank (Remitting bank).The Remitting bank sends the documents along with the Exporter's instructions to a designated bank in the importing country (Collecting Bank).Depending on the terms of the sales contract, the Collecting Bank would release the documents to the importer only upon receipt of payment or acceptance of draft from the buyer. (The importer will then present the shipping documents to the carrier in exchange for the goods).Having received payment, the collecting bank forwards proceeds to the Remitting Bank for the exporter's account.Once payment is received, the Remitting bank credits the Exporter's account, less its charges.Advantages and disadvantages of Documentary CollectionThe major advantage of a "cash against documents" payment method for the Buyer is the low cost, versus opening a Letter of Credit. The advantage for the Seller is that he can receive full payment prior to releasing control of the documents, although this is offset by the risk that the Buyer will, for some reason, reject the documents (or they will not be in order). Since the cargo would already be loaded (to generate the documents), the Seller has little recourse against the Buyer in cases of non-payment. A payment against documents arrangement involves a high level of trust between the Seller and the Buyer and should be adopted only by parties well known to each other.Risks in Documentary CollectionsFor the ExporterIf it is a sight draft, the exporter will reduce the risk of non-payment but will not eliminate it totally since the importer may not be in a position to pay for the goods or may not be able to procure sufficient foreign exchange to make the payment. In this case the exporter may be forced to either call back the goods or negotiate sale to some other interested party, which may be at a reduced rate.In the case of term draft, the risk to the exporter is higher since the foreign buyer will take possession of the goods and may not pay at due date, forcing therefore the exporter to try and collect payment from the foreign buyer in the foreign buyer's home country.For the ImporterThe importer faces the risk of paying for goods of sub-standard quality or even with shortages. In such a circumstance, it would take some time to get refunds from the exporter. It could also happen that the exporter refuses to make refunds, leading the importer to lengthy legal proceedings.When to use Documentary Collections?Since Documentary Collections transactions entail some measure of trust, it advisable to use the mechanism when the following conditions apply:· When the exporter and importer have a well-established relationship· When there is little or no threat of a total loss resulting from the buyer's inability or refusal to pay· When the foreign political and economic situation is stable· When a letter of credit is too expensive or not allowed6. Letter of CreditA letter of credit is the most widely used trade finance instrument in the world. It has been used for the last several hundred years and is considered a highly effective way for banks to transact and finance export and import trade. The letter of credit is a formal bank letter, issued for a bank's customer, which authorizes an individual or company to draw drafts on the bank under certain conditions. It is an instrument through which a bank furnishes its credit in place of its customer's credit. The bank plays an intermediary role to help complete the trade transaction. The bank deals only in documents and does not inspect the goods themselves.Therefore a letter of credit cannot prevent an importer from being taken in by an unscrupulous exporter.The Uniform Commercial Code and the Uniform Customs and Practices for Documentary Credits published by the United States Council of the International Chamber of Commerce set forth the covenants governing the issuance and negotiation of letters of credit.All letters of credit must be issued:· In favor of a specific beneficiary,· for a specific amount of money,· in a form clearly stating how payment to the beneficiary is to be made and under what conditions, and· with a specific expiration date.Role of Banks in Documentary Letters of Credit· Compared to other payment forms, the role of banks is substantial in documentary Letter of Credit transactions.· The banks provide additional security for both parties in a trade transaction by playing the role of intermediaries. The issuing bank working for the importer and the advising bank working for the exporter.· The banks assure the seller that he would be paid if he provides the necessary documents to the issuing bank through the advising bank.· The banks also assure the buyer that his money would not be released unless the shipping documents evidencing proper and accurate shipment of goods are presented.Types of Letters of Credit – 1A letter of credit may be of two forms: Revocable or IrrevocableRevocable L/CThis is one that permits amendments or cancellations any time by the issuing bank. This means that the exporter can not count on the terms indicated on the initial document until such a time as he is paid. This form is rarely in use in modern day trade transactions.Irrevocable L/CSuch a letter of credit cannot be changed unless both buyer and seller agree to make changes. Usually an L/C is regarded as irrevocable unless otherwise specified. Therefore, in effect, all the parties to the letter of credit transaction, i.e. the issuing bank, the seller and the buyer, must agree to any amendment to or cancellation of the letter of credit. Irrevocable letters of credit are attractive to both the seller and the buyer because of the high degree of involvement and commitment by the bank(s). By the 1993 revision of the UCP, credits are deemed irrevocable, unless there is an indication to the contrary.Types of Letters of Credit - 2A letter of credit may be of two forms: Confirmed or Unconfirmed.Confirmed L/CIf the exporter is uncomfortable with the credit risk of the issuing bank or if the country where the issuing bank is situated is less developed or politically unstable, then as an extra measure, the exporter can request that the L/C to be confirmed. This would add further comfort to the transaction; an exporter may request that the L/C be confirmed. This is generally by a first class international bank, typically the advising bank (now the Confirming Bank). This bank now takes the responsibility of making payments if no remittance is received from the issuing bank on due date.Unconfirmed L/CIn contrast, an unconfirmed credit does not require the advising bank to add its own payment undertaking. It therefore leaves the liability seller with the issuing bank. The advising bank is merely as a channel of transmission of documents and payment.Methods of SettlementThe documentary letters of credit can be opened in two ways:Sight Letter of Credit: A Sight Letter of Credit is a credit in which the seller obtains payment upon presentation of documents in compliance with the terms and conditions.Time Draft or Usance Letter of Credit: A Time Draft or Usance Letter of Credit is a credit in which the seller will be paid a fixed or determinable future time. A time Draft or usance letter of credit calls for time or usance drafts to be drawn on and accepted by the buyer, provided that documents are presented in good order. The buyer is obligated to pay the face amount at maturity. However, the issuing bank's obligation to the seller remains in force until and unless the draft is paid.Financing Importers through Letters of CreditWhile the L/C can be used as a payment mechanism, it can also be used to provide financing to the applicant (importer). Deferred and Acceptance credits (i.e. term credits) are considered to be financing instruments for the importer/buyer. Both payment structures provide the importer/buyer the time opportunity to sell the goods and pay the amount due with the proceeds.Under the Deferred Payment structure payment is made to the seller at a specified future date, for example 60 days after presentation of the documents or after the date of shipment (i.e. the date of the bill of lading).Under the Acceptance structure the exporter is required to draw a draft (bill of exchange) either on the issuing or confirming bank. The draft is accepted by the bank for payment at a negotiated future fixed date. This gives the importer the potential time needed to sell the product and pay off the Acceptance at due date. For example, payment date under an acceptance credit may be at sight or after 90 days from presentation of the documents or from the shipment of goods.Special Note on Documentary Letters of CreditDocumentary Letters of Credit hinge much on the appropriateness of documents. Banks involved in the transaction do not need to know about the physical state of the goods in question but concern themselves only with documents. If proper documents are presented, banks will make payment whether or not the actual goods shipped comply with the sales contract.Thus, special care needs to be taken in preparation of the documents since a slight omission or discrepancy between required and actual documents may cause additional costs, delays and seizures or even total abortion of the entire deal.(1) Documents associated with an L/CDocuments are the key issue in a letter of credit transaction. Banks deal in documents, not in goods. They decide on the basis of documents alone whether payment, negotiation, or acceptance is to be effected. A single transaction can require many different kinds of documents. Most letter of credit transactions involve a draft, an invoice, an insurance certificate, and a bill of lading. Transactions can culminate in sight drafts or acceptances. Because letter of credit transactions can be so complicated and can involve so many parties, banks must ensure that their letters are accompanied by the proper documents, that those documents are accurate, and that all areas of the bank handle them properly.The four primary types Documents associated with an L/C are as follows:· Transfer documents· Insurance documents· Commercial documents· Other documentsTransfer documents are issued by a transportation company when moving the merchandise from the seller to the buyer. The most common transfer document is the Bill of lading. The bill of lading is a receipt given by the freight company to the shipper. A bill of lading serves as a document of title and specifies who is to receive the merchandise at the designated port (as specified by the exporter). It can be in nonnegotiable form (straight bill of lading) or in negotiable form (order bill of lading). In a straight bill of lading, the seller (exporter) consigns the goods directly to the buyer (importer). This type of bill is usually not desirable in a letter of credit transaction, because it allows the buyer to obtain possession of the merchandise without regard to any bank agreement for repayment. A straight bill of lading may be more suitable for prepaid or open account transactions. With an order bill of lading the shipper can consign the goods to the bank, which retains title until the importer acknowledges liability to pay. This method is preferred in documentary or letter of credit transactions. The bank maintains control of the merchandise until the buyer completes all the required documentation. The bank then releases the bill of lading to the buyer, who presents it to the shipping company and gains possession of the merchandise.Insurance documents, normally an insurance certificate, cover the merchandise being shipped against damage or loss. The terms of the merchandise contract may dictate that either the seller or the buyer obtain insurance. Open policies may cover all shipments and provide for certificates on specific shipments.Commercial documents, principally the invoice, are the seller's description of the goods shipped and the means by which the buyer gains assurances that the goods shipped are the same as those ordered. Among the most important commercial documents are the invoice and the draft or bill of exchange. Through the invoice, the seller presents to the buyer a statement describing what has been sold, the price, and other pertinent details. The draft supplements the invoice as the means by which the seller charges the buyer for the merchandise and demands payment from the buyer, the buyer's bank, or some other bank. Although a draft and a check are very similar, the writer of a draft demands payment from another party's account.In a letter of credit, the draft is drawn by the seller, usually on the issuing, confirming, or paying bank, for the amount of money due under the terms of the letter of credit. In a collection, this demand for payment is drawn on the buyer. The customary parties to a draft, which is a negotiable instrument, are the drawer (usually the exporter), the drawee (the importeror a bank), and the payee (usually the exporter), who is also the endorser. A draft can be "clean" (an order to pay) or "documentary" (with shipping documents attached).A draft that is negotiable:· Is signed by the maker or drawer· Contains an unconditional promise to pay a certain sum of money· Is payable on demand or at a definite time· Is payable to order or to bearer· Is two-name paperMay be sold and ownership transferred by endorsement to the "holder in due course."The holder in due course has recourse to all previous endorsers if the primary obligor (drawee) does not pay. The seller (drawer) is the secondary obligor if the endorser does not pay. The secondary obligor has an unconditional obligation to pay if the primary obligor and the endorser do not, therefore the term "two-name paper."Other documents include certain official documents that may be required by governments in order to regulate and control the passage of goods through their borders.Governments may require· inspection certificates,· consular invoices, or· certificates of origin.· Transactions can entail notes and advances collateralized by trust receipts or· warehouse receipts.