National Income and the Balance of Payments Accounts
particular, the current account contract) without notice and at no charge prior to the .. Proper notice of termination of the business relationship with an entrepreneur. No. I. TRADING IN SECURITIES AND OTHER ASSETS. A. Scope. No. First, GDP is measured in terms of the monetary (or dollar) value at which the . is to use the identity to suggest a relationship between imports and GDP growth. .. The current account is often further subdivided into the merchandise trade it finished a four-year run with a trade deficit and a government budget surplus. The Economist and The Economist online are trading names of The Term and Termination; Governing Law and Jurisdiction; Previous . right to a refund in relation to any issues that have been published before you cancelled. any processing or other fees charged by the issuing bank/payment provider.
In such case, the Bank shall, to that extent, be released from its obligation to perform the Money Transfer Transaction in accordance with the conditions confirmed by the customer upon the Bank's acceptance of the Money Transfer Request. In addition to the cases referred to in Paragraph 1 or 2 when the Cash Receipt Method is taken, there may be cases where the receiver is able to receive payment in a currency other than the Payout Currency or in any form other than cash under a separate transaction between the receiver and the Payment Center, but such transactions shall be conducted at the receiver's own responsibility.
Regardless of the reason behind the receiver's decision to enter into such a separate transaction including the existence of circumstances that correspond to the case referred to in Article 9, Paragraph 3the Bank shall not in any way be liable for any change of the conditions confirmed by the customer upon the Bank's acceptance of the Money Transfer Request, or for any cost incurred by, or any adverse effect inflicted upon, the receiver in connection with such a separate transaction.
Article 9 Place of Payment for the Cash Receipt Method The payment under a Money Transfer Transaction may be received by the receiver at any Payment Center located in the Payout Country during its business hours on its business day by taking the payment request procedures prescribed by the Payment Center. Such procedures include the presentation or submission of: Notwithstanding the provisions of Paragraph 1, even if the Bank has accepted the customer's Money Transfer Request, the receiver may not be able to receive such payment at all or a part of the Payment Centers in the Payout Country due to the Restriction on Transactions established by the Alliance Partner or the Payment Center pursuant to Article 5, Paragraph 3.
In such a case, the Bank shall, to that extent, be released from its obligation to perform the Money Transfer Transaction in accordance with the conditions confirmed by the customer upon the Bank's acceptance of the Money Transfer Request. Article 10 Receiver's Bank Account for the Credit-to-Account Method When the Credit-to-Account Method is used, the transferred funds are credited to the Receiver's Bank Account by the Receiver's Bank upon completion of the prescribed procedures in accordance with the conditions established by the Alliance Partner or the laws and regulations of the Payout Country.
Notwithstanding Paragraph 1, even if the Bank has accepted a Money Transfer Request from the customer, the amount to be transferred under such request may not be credited to the Receiver's Bank Account due to Restrictions on Transactions prescribed by the Alliance Partner or the Receiver's Bank pursuant to Article 5, Paragraph 3. In such case, after accepting the Money Transfer Request, the Bank will, to that extent, be released from its obligation to carry out the relevant Money Transfer Transaction in accordance with the conditions that were confirmed by the customer at the time of acceptance of the relevant Money Transfer Request.
In the case where the Credit-to-Account Method is taken in China, if the receiver is receiving funds in the Receiver's Bank Account designated by the customer for the first time, the receiver must call the Alliance Partner. In such case, it may take longer than usual for the crediting of the relevant amount to the Receiver's Bank Account to be completed, because the aforementioned procedure must be completed first.
If the receiver has not contacted the Alliance Partner within the aforementioned time period, the Alliance Partner will call the receiver. However, if the receiver cannot be reached, the Money Transfer Request will be canceled and the Bank will return the transfer funds to the customer.
If the Credit-to-Account Method is taken in the Philippines, only the account number is checked to ensure that it matches the Receiver's Bank Account designated by the customer, and no steps are taken to ensure that the account holder matches the name of the receiver.
Balance of payments and Terms of Trade | Economics Help
As such, when using the Credit-to-Account Method in the Philippines, it is particularly important to ensure that the account number for the Receiver's Bank Account is accurate, and we encourage you to be extra careful when registering the receiver's information.
Article 11 Payment of the Transfer Funds and Costs The customer must, in making a Money Transfer Request, pay the funds to be transferred, as well as the transfer fees prescribed by the Bank and other charges and costs required for the Money Transfer Transaction such funds, fees, charges, and costs shall hereinafter be collectively referred to as "Transfer Funds and Costs" in Japanese yen.
Such payment shall be made by having the relevant amount debited from the Account without requiring the performance of a separate withdrawal procedures by the customer, and such payment may not be made in cash. Article 12 Acquisition and Use, etc. For the purpose of enabling the Alliance Partners, the outsourcing contractor of the Alliance Partners, the Payment Centers and the Receivers'Bank collectively referred to as the "Alliance Partners, Etc.
The Alliance Partners, Etc. In relation to such purposes, information may be shared between the Alliance Partner, Etc. Article 13 Termination of Agreement, Suspension of Service If the Bank deems that any one of the following events has occurred, the Bank may immediately terminate the International Money Transfer Service Agreement with the customer or suspend the customer's use of the whole or part of the International Money Transfer Service in the manner prescribed by the Bank without prior notice to the customer: If the Bank deems at any time that a receiver registered by the customer falls under any one of the following events, the Bank may immediately terminate the registration of such receivers in the manner prescribed by the Bank without prior notice to the customer: The Bank may lift the suspension of the customer's use of the International Money Transfer Service invoked under Paragraph 1 in the manner prescribed by the Bank at any time that it deems appropriate.
If any measure is taken by the Bank pursuant to any of the preceding three paragraphs, the Bank shall notify the customer to that effect in the manner prescribed by the Bank.
If the customer wishes to terminate the International Money Transfer Service Agreement or terminate the registration of any receiver, the customer shall notify the Bank to that effect in the manner prescribed by the Bank. If the customer's Account is terminated, the International Money Transfer Service Agreement between the customer and the Bank shall also be deemed to have terminated.
Article 14 Cancellation by the Customer The customer may cancel a Money Transfer Transaction if the payment to the receiver in the case of the Cash Receipt Method has not yet been completed. In such a case, the customer shall take the procedures prescribed by the Bank; provided, however, that such cancellations may not be allowed if it is prohibited under the Foreign Exchange Laws or rejected by the Alliance Partner.
In such a case, the Bank shall not be liable for any damages arising therefrom. As a general rule, deposits made into the Receiver's Account for deposit into a bank account cannot be cancelled.
If the customer terminates the Account or the International Money Transfer Service Agreement, the customer shall be deemed to have requested the cancellation of all of the customer's pending Money Transfer Transactions pursuant to Paragraph 1, including payment to the receiver in the case of the Cash Receipt Method and crediting of amounts to the Receiver's Bank Account in the case of the Credit-to- Account Methodand the Bank shall take the relevant procedures to cancel such Money Transfer Transactions.
Article 15 Reversal by the Customer for the Credit-to-Account Method The customer must submit the Bank's prescribed transfer reversal request form to carry out a reversal. When submitting said form, the Bank may require the customer to submit the Bank's prescribed identity verification documents or provide a guarantor.
In addition, there may be cases where it takes a considerable period of time to confirm with the Alliance Partner whether or not such reversal can be conducted.
The Bank's prescribed reversal fee must be paid in Japanese yen when making a request for a reversal. This payment shall be made by way of account transfer, without the submission by the customer of any separate repayment request form, and the Bank will not accept any such payment in cash. However, if a reversal is deemed to have occurred due to any of the events set forth in Article 17, Paragraph 4, the reversal fee shall be returned or if such circumstances have already become clear as at the time of acceptance of the request, the Bank may, at its discretion, decide in advance not to charge a reversal fee.
Please note that the reversal fee will not be returned in this such case as well. A reversal may not be possible due to the rejection by the Receiver's Bank or due to any restrictions under the laws and ordinances of the relevant country or due to any measures imposed by the government, court or any other public institution. In such case, the Bank shall not be responsible for any damages arising in relation thereto.
- Current Account
- The Role of Imports in the National Income Identity
In addition, the Bank will not refund the reversal fee. Article 16 Cancellation by the Bank If the Bank deems that the Money Transfer Transaction based on a Money Transfer Request accepted by the Bank falls under any one of the following events, the Bank may immediately cancel the Money Transfer Transaction in the manner prescribed by the Bank without prior notice to the customer: In the case where the Cash Receipt Method is used, if the payment to the receiver based on a Money Transfer Request cannot be completed within a period of 30 days from the date of the Bank's acceptance of such Money Transfer Request, the Bank shall, in principle, cancel the Money Transfer Transaction in the manner prescribed by the Bank without prior notice to the customer promptly after the date of expiration of the said day period or promptly after the business day immediately following an expiration date if it falls on a Saturday, Sunday, national holiday or other statutory non-business day for banks ; provided, however, that the foregoing shall not apply if the payment to the receiver is completed prior to such cancellation process.
In the case of the Credit-to-Account Method, the funds may be returned if the relevant amount cannot be credited to the Receiver's Bank Account for any reason. In such case, the Money Transfer Transaction shall be canceled without prior notice to the customer and the returned transfer funds shall be credited to the customer's account using the Bank's prescribed method.What does Current Account mean?
If the Bank cancels a Money Transfer Transaction pursuant to Paragraph 1, the Bank shall notify the customer to that effect in the manner prescribed by the Bank. The Bank shall not be obligated to notify the customer of any cancellation by the Bank under Paragraph 2 and 3. This would mean an increase in the supply of pound sterling and lower demand.
Therefore, it is likely to cause a devaluation. This would mean cheaper exports and more expensive imports. We say this would be a deterioration in the terms of trade. Example, in the early s, the US has a large trade deficit, and this has been contributing to a devaluation of the dollar. Therefore there are a deteriorating the terms of trade. However, other factors may be affecting the terms of trade.
This main category represents the largest share of GDP spending in the U. Definitions Learning Objectives Learn the variety of ways exports and imports are classified in the balance of payments accounts.
The balance of payments accounts is a record of all international transactions that are undertaken between residents of one country and residents of other countries during the year. The accounts are divided into several subaccounts, the most important being the current account A record of all international transactions for goods and services, income payments and receipts, and unilateral transfers.
The current account is often further subdivided into the merchandise trade account and the service account. These are each briefly defined in Table 2. The current account is used in the national income identity for GNP.
Merchandise Trade Account A record of all international transactions for goods only. Record of all international transactions for goods only.
Goods include physical items like autos, steel, food, clothes, appliances, furniture, etc. Services Account A record of all international transactions for services only. Record of all international transactions for services only. Services include transportation, insurance, hotel, restaurant, legal, consulting, etc.
Goods and Services Account A record of all international transactions for goods and services only. Record of all international transactions for goods and services only. The goods and services account is used in the national income identity for GDP. Financial Account Record of all international transactions for assets. Assets include bonds, Treasury bills, bank deposits, stocks, currency, real estate, etc. The balance on each of these accounts is found by taking the difference between exports and imports.
Income payments represent the money earned i. For example, if a British company owns an office building in the United States and brings back to the United Kingdom a share of the profit earned there as a part of its income, then this is classified as an income payment on the current account of the balance of payments. Income receipts represent the money earned by domestic residents on their investments abroad.
For example, if a U. It may be helpful to think of income payments and receipts as payments for entrepreneurial services.
For example, a British company running an office building is providing the management services and taking the risks associated with operating the property. In exchange for these services, the company is entitled to a stream of the profit that is earned. Thus income payments are classified as an import, the import of a service. Since in this case the United States is exporting a service, income receipts are classified as a U.
Unilateral transfers represent payments that are made or received that do not have an offsetting product flow in the opposite direction. Normally, when a good is exported, for example, the good is exchanged for currency such that the value of the good and the value of the currency are equal.
Thus there is an outflow and an inflow of equal value. An accountant would record both sides of this transaction, as will be seen in the next section. However, with a unilateral transfer, money flows out, but nothing comes back in exchange or vice versa. The primary examples of unilateral transfers are remittances and foreign aid. Remittances occur when a person in one country transfers money to a relative in another country and receives nothing in return.
Foreign aid also involves a transfer, expecting nothing in return. Often when this term is used the person is referencing the goods and services balance. Occasionally, one will hear trade deficit figures reported in the U. In this case, the numbers reported refer to the current account deficit rather than the merchandise trade deficit. This usage is developing for a couple of reasons.
First of all, at one time, around thirty years ago or more, there was very little international trade in services. At that time, it was common to report the merchandise trade balance since that accounted for most of the international trade.
Balance of payments and Terms of Trade
In the past decade or so, service trade has been growing much more rapidly than goods trade and it is now becoming a significant component of international trade.
In the United States, service trade exceeds 30 percent of total trade. There is a greater chance that people will recognize the trade deficit although most could probably not define it either than will recognize the current account deficit. I will ascribe to this convention throughout this text in the hope that it might catch on. Both represent the total value of output in a country during a year, only measured in slightly different ways. It is worthwhile to understand the distinction between the two and what adjustments must be made to measure one or the other.
Conceptually, the gross domestic product GDP represents the value of all goods and services produced within the borders of the country. The gross national product GNP represents the value of all goods and services produced by domestic factors of production. Thus production in the United States by a foreign-owned company is counted as a part of U.
GDP since the productive activity took place within the U. Similarly, production by a U. This production will count as a part of GNP though since the income goes to a U.