Import / Export Introduction


What is import?

Importer agrees to a sale contract note with the exporter to bring goods made or processed abroad into the country through a certain clearing process


What is export?

Sending goods produced in a country to another country for sale.


Means of fund transfer at Shinhan Bank Canada

Documents required for Import/ Export (Foreign Exchange) Transaction Agreement

  • Documents for opening a business account such as Business Registration
  • Documents for opening a personal account such as Driver’s License, SIN
  • Import/Export sale(trade) contract
  • Foreign Currency Transaction Agreement (At branch)
  • Other loan/credit related documents (At branch)

*Please contact the branch staff for more details.

Methods of payments for import/export

  • Remittance : Payments can be made in advance (Simple payment), where the importer pays the full amount before receiving the shipment, and payments can be made after receiving the shipment or the shipping documents. The types of payments that can be made post-delivery are COD (Cash on Delivery) and CAD (Cash Against Documents).

- Payment in advance

A method where the importer remits the price of goods to the exporter in advance of the receiving of shipment. Exporter sends the shipment after confirming the payment. Exporters are at an advantage using this method.

- Payment after receiving shipment

A method that requires the exporter to ship the goods before receiving payment. The importer makes the payment after receiving the shipment. This method has the importers at absolute advantage. The types of payments that can be made post-delivery are COD and CAD transaction methods.

COD (Cash On Delivery)

Type of transaction where the exporter sends the shipping documents to the exporter’s representative (usually located in the importer’s country) after shipping the goods. When the shipment arrives, importer checks the condition of the goods and then remits the full amount. It is usually used when trading jewellery or luxurious goods.

CAD (Cash Against Documents)

The exporter receives the payment after shipping the goods and then sends the shipping documents to the importer’s representative (usually located in the exporter’s country).

  • Collections : After preparing the required shipping documents in accordance with the trade contract, a bill of exchange can be issued having the importer as payer. Through its trading bank, the exporter can collect the payment through either D/P or D/A.
    Since involving banks into the payment settling process, the trading risk has been considerably reduced compared to remittance methods (COD, CAD). However, due to its reliance on trust between the participants, the trade is still considered risky.

- D/P (Documents against Payment )

As the exporter ships goods, an at-sight bill of exchange is issued having the importer as the payer. After the at-sight bill of exchange and shipping documents are presented to the collection bank, which is located in the importer’s country, the payment is collected. The collection bank then presents the bill of exchange to the importer who transfers the payment upon receiving the shipping documents.

- D/A (Documents against Acceptance ) 

Collecting bank presents the shipping documents and related usance bill of exchange to the importer. After the importer accepts the usance bill of exchange, deliver the shipping document and collect the payment on the expiry date of the bill of exchange. The collecting bank must then remit the payment to the exporter’s bank who requested the collection.

  • Documentary Credit/ Letter of Credit : Since remittance or collection (D/P – Documents against Payment, D/A – Documents against Acceptance) entirely depend on the credit ratings of the importer and exporter, payment in advance exposes importers to the risk of not receiving the goods while other remittance or collection methods expose exporters to the risk of not receiving payment.
    To eliminate the anxiety towards any possible international trading risks, the importer’s bank confirms payment on behalf of the importer to prevent the default risk of the importer.
    The importer receives documents that are in line with letter of credit conditions and makes payment to the issuing bank; this prevents commercial risk that the seller will fail to provide goods.
    L/C transactions are categorized according to the following types: AT SIGHT and USANCE.


By either issuing bill of exchange at sight or not issuing the bill of exchange, the beneficiary can present shipping documents directly to issuing bank, confirming bank, or designated bank and receive payment.


Letter of credit that agrees to pay at maturity date and the beneficiary obtains bill of exchange when s/he presents shipping documents or usance bill along with shipping documents.

* Types of Documentary Credits

  • Payment Methods

Payment Method



Payment in Advance Receive payment before export, Shipping documents are sent directly to the importer (Advantage) Remit before importing goods(Disadvantage)

Payment After Receiving Shipment


Invoice is sent after Shipping documents are sent Remit when Exporter’s agent receives Shipping documents


Remit when Exporter receives goods from the agent

Documentary Collection


Shipping documents sent through the bankPaid after Shipping documents have been sent Paid right after receiving the shipping documents.

Collecting bank does not transfer the documents with out payment


Collecting bank accepts the Shipping documents and pays on expiry

Documentary Credit

At sight

Shipping document is sent via the negotiating bank.
Payment received after shipping document is sent.
The issuing bank guarantees the payment
After receiving the shipping document from the issuing bank, payment is made within 7 business days if there is no discrepancy


The issuing bank accepts the shipping document and pays on expiry date of bill of exchange