BBA603

Q.1 Globalization is defined as a concept which connects countries across the world
through information, trade and technology. Critically explain the concept.

ANS:- Globalization or globalisation (see spelling differences) is the process of international

integration arising from the interchange of world views, products, ideas, and other aspects of culture.
[1]

Advances in transportation (such as the steam locomotive, steamship, jet engine, and container

ships) and in telecommunicationsinfrastructure (including the rise of the telegraph and its modern
offspring, the Internet, and mobile phones) have been major factors in globalization, generating
furtherinterdependence of economic and cultural activities.[2][3][4] Though many scholars place
the origins of globalization in modern times, others trace its history long before theEuropean Age of
Discovery and voyages to the New World. Some even trace the origins to the third millennium BC.[5]
[6]

Large-scale globalization began in the 19th century.[7] In the late 19th century and early 20th

century, the connectivity of the world's economies and cultures grew very quickly.
The term globalization is recent, only establishing its current meaning in the 1970s. [8] In 2000,
the International Monetary Fund (IMF) identified four basic aspects of
globalization: trade and transactions, capital and investment movements,migration and movement of
people, and the dissemination of knowledge.[9] Further, environmental challenges such as global
warming, cross-boundary water and air pollution, and overfishing of the ocean are linked with
globalization.[10] Globalizing processes affect and are affected by business and work organization,
economics, socio-cultural resources, and the natural environment. Academic literature commonly
subdivides globalization into three major areas: economic globalization, cultural globalization,
and political globalization.[ The term globalization is derived from the word globalize, which refers to
the emergence of an international network of economic systems.[12] One of the earliest known usages
of the term as a noun was in a 1930 publication entitled Towards New Education, where it denoted a
holistic view of human experience in education.[13] A related term, corporate giants, was coined
by Charles Taze Russell (of the Watch Tower Bible and Tract Society) in 1897[14] to refer to the largely
national trusts and other large enterprises of the time. By the 1960s, both terms began to be used as
synonyms by economists and other social scientists. Economist Theodore Levitt is widely credited
with coining the term in an article entitled "Globalization of Markets", which appeared in the May
June 1983 issue of Harvard Business Review. However, the term 'globalization' was in use well
before this (at least as early as 1944) and had been used by other scholars as early as 1981. [15] Levitt
can be credited with popularizing the term and bringing it into the mainstream business audience in
the later half of the 1980s. Since its inception, the concept of globalization has inspired competing
definitions and interpretations, with antecedents dating back to the great movements of trade
and empire across Asia and the Indian Ocean from the 15th century onwards.[16][17]Due to the

complexity of the concept, research projects, articles, and discussions often remain focused on a
single aspect of globalization.[18]
Sociologists Martin Albrow and Elizabeth King define globalization as "all those processes by which
the peoples of the world are incorporated into a single world society." [1] In The Consequences of
Modernity, Anthony Giddens writes: "Globalization can thus be defined as the intensification of
worldwide social relations which link distant localities in such a way that local happenings are
shaped by events occurring many miles away and vice versa." [19] In 1992, Roland Robertson,
professor of sociology at the University of Aberdeen, an early writer in the field, defined globalization
as "the compression of the world and the intensification of the consciousness of the world as a whole
Q.2 Compare the relationship between Current Account, Capital Account and Official Reserve

Account. Illustrate the concept of BoP Accounting

ANS:- The basic equation of a country's balance of payments is analogous to a company's balance
sheet. The capital account and current account have to net out to zero, with central bank reserves
functioning as the plug to account for any difference. If a country has a capital surplus (ie, foreigners
are net investors of capital into the country), then it will run a current account deficit. The US is a
pretty stable example of this: for a long time, the US has consumed more than it earned, leading to a
current account deficit, which has been balanced out by a capital account surplus (ie, foreigners
financing our spending--mainly by buying our debt.)
Reserves can come into play as a form of making the whole thing balance. China runs both a capital
account surplus AND a current account surplus--foreigners are both investing into China and buying
more exports from China than China imports from them. As a result, Chinese currency reserves must
grow every year by the amount of the combined surpluses to make things balance out.

Balance of Payments and related statistics

Balance of Payments (BoP), International Investment Position (IIP) and External Debt
(ED) statistics are important macroeconomic aggregates that summarise the external
transactions and positions of an economy with the rest of the world. They are important
for monetary and financial monitoring and policy deliberations in both the domestic and
international contexts.
BoP and IIP statistics of Hong Kong are compiled in accordance with international
standards as stipulated in the Sixth Edition of the Balance of Payments and
International Investment Position Manual released by the International Monetary Fund
(IMF) in 2009. ED statistics of Hong Kong are compiled according to the 2013 External
Debt Statistics: Guide for Compilers and Users published by the Inter-agency Task

Force on Finance Statistics chaired by the IMF. Concepts inherent in these two
international guidelines are harmonised with each other.
The annual BoP account of Hong Kong has been compiled since the reference year of
1998, while the quarterly BoP account has been compiled since the reference period of
the first quarter of 1999. The annual IIP statistics have been compiled since the
reference year of 2000, while the quarterly IIP statistics have been compiled since the
reference period of the first quarter of 2010. The quarterly ED statistics have been
compiled since the reference period of the first quarter of 2002.
BoP, IIP and ED statistics are subject to routine revision when the estimates of
individual components are updated upon the availability of more data. The revision
schedule for the goods and services components of the BoP account is in line with that
for the Gross Domestic Product (GDP) estimates, i.e. the goods and services
components for the current year and the preceding 2 years are subject to revision. For
statistics pertaining to other components of BoP, IIP and ED, the quarterly and annual
figures for a reference year will be revised in December of the following year.
In addition to routine revisions, it is an established practice of the Census and Statistics
Department to undertake non-routine technical revision exercises from time to time to
enhance the quality of Hong Kongs BoP, IIP and ED statistics by suitably incorporating
new data sources, improved estimation methods, and changes in international
standards, definitions and classifications which are results of continuous research and
development on the BoP, IIP and ED compilation frameworks. This is in line with the
international practice to improve the quality and reliability of BoP, IIP and ED statistics.
In a non-routine revision exercise, the entire series of BoP, IIP and ED and their
components may be subject to revision in accordance with the scope of the exercise
concerned..
Balance of Payments
BoP is a statistical statement that systematically summarises, for a specific time period
(typically a year or a quarter), the economic transactions of an economy with the rest of
the world (i.e. between residents and non-residents).
A complete BoP account comprises two broad accounts: (a) the current account; and
(b) the capital and financial account.
The current account measures the flows of goods, services, primary income and
secondary income between residents and non-residents.
The goods and services account records external transactions in goods and services.
The goods account covers principally exports and imports as shown in merchandise
trade statistics, but adjusted for coverage and valuation. For example, one major

adjustment for coverage is the adoption of the change of ownership principle in the BoP
statistical system. Following this principle, goods sent abroad for processing without a
change of ownership are not covered in the goods account. On the other hand, for
goods sold under merchanting, although the goods involved have never been entered
into the economy where the owner resides in, they are recorded in the goods account of
the owners economy given that there has been a change of ownership of the goods.
The goods account values both exports and imports of goods on the same basis of freeon-board (f.o.b.) from the economy of export, thus providing symmetrical valuation.
While the goods sent abroad for processing without a change of ownership are not
covered in the goods account of an economy, the manufacturing services performed on
these goods by a processor in another processing economy are covered in its services
account. Other services cover a wide range of economic activities, including transport,
travel, insurance and pension, financial services, etc.
The primary income account shows the amounts receivable and payable abroad in
return for providing / obtaining use of labour, financial resources or natural resources
to / from non-residents. The concepts and definitions of primary income under the
current account of the BoP are the same as those of the external primary income flows
under GNI.
The secondary income account records current transfers between residents and nonresidents. Current transfers are transactions in which real or financial resources that are
likely to be consumed immediately or shortly are provided without the receipt of
equivalent economic values in return. Examples include workers remittances,
donations, official assistance and pensions. Current transfers are unilateral in nature
and are offsetting entries in the BoP account for one-sided transactions. Credit entries in
this account reflect offsetting entries to the receipt of aforesaid real and financial
resources from other economies. Conversely, debit entries recorded are offsets to the
provision of such real and financial resources to other economies. Secondary income,
together with primary income, affects gross national disposable income which has a
direct and immediate effect on an economy's pattern of consumption in a specified
period.
(b) Capital and financial account
The capital account measures external transactions in capital transfers, and the
acquisition and disposal of non-produced, non-financial assets (such as trademarks and
brand names). Examples of capital transfers include forgiveness of debts by creditors,
and cash transfers involving the acquisition or disposal of fixed assets.
The financial account records transactions in financial assets and liabilities between
residents and non-residents. It shows how an economy's external transactions are
financed. Transactions in the financial account are classified by function (i.e. the

purpose of the investment) into direct investment, portfolio investment, financial

derivatives, other investment and reserve assets.
Q.3 Give introduction on foreign exchange. Elaborate on foreign exchange markets and role of
international forex markets.
ANS:- Foreign Exchange is an international financial market place where money is sold and
bought freely. It is a non-stop cash market where you speculate on changes in exchange rates of
foreign currencies. Forex operates through a global network of banks, corporations and individuals
trading one currency for another but has no physical location and no central exchange not just like
other financial markets. The Forex market spans from one zone to another in all major financial
centers on a 24- hour basis since it has no physical exchange. Since there is no centralized
exchange for currencies to be sold or bought, forex is considered to be an over- the counter
market or what is called OTC. Banks and forex dealers are connected around the world via
internet, fax and telephone to form the Forex market. Read through this article, introduction to
forex, in order to know more about forex trading as well as its purpose and many more. Learning
forex enables us to know some forex terms, codes, numbers and definitions. Forex trading 101 or
the introduction to forex trading will enable us to know how forex works and how to make money
with currency trading on forex.
The foreign exchange market (forex, FX, or currency market) is a globaldecentralized market for
the trading of currencies. This includes all aspects of buying, selling and exchanging currencies at
current or determined prices. In terms of volume of trading, it is by far the largest market in the world,
followed by the Credit market.[1] The main participants in this market are the larger international
banks. Financial centres around the world function as anchors of trading between a wide range of
multiple types of buyers and sellers around the clock, with the exception of weekends. The foreign
exchange market does not determine the relative values of different currencies, but sets the current
market price of the value of one currency as demanded against another.
The foreign exchange market works through financial institutions, and it operates on several levels.
Behind the scenes banks turn to a smaller number of financial firms known as "dealers", who are
actively involved in large quantities of foreign exchange trading. Most foreign exchange dealers are
banks, so this behind-the-scenes market is sometimes called the "interbank market", although a few
insurance companies and other kinds of financial firms are involved. Trades between foreign
exchange dealers can be very large, involving hundreds of millions of dollars. Because of the
sovereignty issue when involving two currencies, forex has little (if any) supervisory entity regulating
its actions.
The foreign exchange market assists international trade and investments by enabling currency
conversion. For example, it permits a business in the United States to import goods from European
Union member states, especially Eurozone members, and pay Euros, even though its income is
in United States dollars. It also supports direct speculation and evaluation relative to the value of

currencies, and the carry trade, speculation based on the interest rate differential between two
currencies.[2]
In a typical foreign exchange transaction, a party purchases some quantity of one currency by
paying with some quantity of another currency. The modern foreign exchange market began forming
during the 1970s after three decades of government restrictions on foreign exchange transactions
(the Bretton Woods system of monetary management established the rules for commercial and
financial relations among the world's major industrial states after World War II), when countries
gradually switched to floating exchange rates from the previous exchange rate regime, which
remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of the following characteristics:

its huge trading volume representing the largest asset class in the world leading to
high liquidity;

its geographical dispersion;

its continuous operation: 24 hours a day except weekends, i.e., trading from 22:00 GMT on
Sunday (Sydney) until 22:00 GMT Friday (New York);

the variety of factors that affect exchange rates;

the low margins of relative profit compared with other markets of fixed income; and

the use of leverage to enhance profit and loss margins and with respect to account size.

As such, it has been referred to as the market closest to the ideal of perfect competition,
notwithstanding currency intervention by central banks.

Q.4 Explain the Foreign Direct Investment (FDI). Give the comparison between American
Depository Receipt (ADR) and Global Depository Receipt (GDR). Write the categories for trade
blocs.
ANS:- Foreign direct investment (FDI) is an investment made by a company or individual in

one country in business interests in another country, in the form of either establishing
business operations or acquiring business assets in the other country, such as ownership or
controlling interest in a foreign company. Foreign directinvestments are distinguished from
portfolio investments in which an investor merely purchases equities of foreign-based
companies. The key feature of foreign direct investment is that it is an investment made that
establishes either effective control of, or at least substantial influence over, the decision

making of a foreign business.

Foreign direct investments are commonly made in open economies, as opposed to tightly
regulated economies, that offer a skilled workforce and above average growth prospects for
the investor. Foreign direct investment frequently involves more than just a capital
investment. It may include provision of management or technology as well.Foreign direct
investments can be made in a variety of ways, including the opening of
a subsidiary or associate company in a foreign country, acquiring a controlling interest in an
existing foreign company, or by means of a merger or joint venture with a foreign
company.The threshold for a foreign direct investment that establishes a controlling interest,
per guidelines established by the Organization of Economic Cooperation and Development
(OECD), is a minimum 10% ownership stake in a foreign-based company, typically
represented for the investor acquiring 10% or more of the ordinary shares or voting shares
of a foreign company. However, that definition is flexible, as there are instances where
effective controlling interest in a firm can be established with less than 10% of the
company's voting shares.
Foreign direct investments are commonly categorized as being horizontal, vertical or
conglomerate in nature. A horizontal direct investment refers to the investor establishing the
same type of business operation in a foreign country as it operates in its home country, for
example, a cell phone provider based in the United States opening up stores in China. A
vertical investment is one in which different but related business activities from the investor's
main business are established or acquired in a foreign country, such as when a
manufacturing company acquires an interest in a foreign company that supplies parts or raw
materials required for the manufacturing company to make its products. A conglomerate
type of foreign direct investment is one where a company or individual makes a foreign
investment in a business that is unrelated to its existing business in its home country. Since
this type of investment involves entering an industry the investor has no previous experience
in, it often takes the form of a joint venture with a foreign company already operating in the
industry.
1.

Global depository receipt (GDR) is compulsory for foreign company to access in any other
countrys share market for dealing in stock. But American depository receipt (ADR) iscompulsory for
non us companies to trade in stock market of usa .

2.

ADRs can get from level -1 to level III. GDRs are already equal to high preference receipt of
level II and level III.

3.

Indian companies prefer to get GDR due to its global use for getting foreign investment for
own business projects.

4.

ADRs up to level I need to accept only general condition of SEC of USA but GDRs can only
be issued under rule 144 A after accepting strict rules of SEC of USA .

5.
6.

GDR is negotiable instrument all over the world but ADR is only negotiable in USA .
Many Indian Companies listed foreign stock market through foreign banks GDR. Names of
these Indian Companies are following :- (A) Bajaj Auto (B) Hindalco (C) ITC ( D) L&T (E) Ranbaxy
Laboratories (F) SBI Some of Indian Companies are listed in USA stock exchange only through
ADRs :- (A) Patni Computers (B) Tata Motors

7.

Even both GDR and ADR is the proxy way to sell shares in foreign market by India
companies ADRs is not substitute of GDRs but GDRs can use on the place of ADRs .

8.

Investors of UK can buy GDRs from London stock exchange and luxemberg stock exchange
and invest in Indian companies without any extra responsibilities . Investors of USA can buy ADRs
from New york stock exchange (NYSE) or NASDAQ (National Association of Securities Dealers
Automated Quotation).

9.

American investors typically use regular equity trading accounts for buying ADRs but not for
GDRs .

10.

The US dollar rate paid to holders of ADRs is calculated by applying the exchange rate used
to convert the foreign dividend payment (net of local withholding tax) to US dollars, and adjusting the
result according to the ordinary share but GDRs is calculated on numbers of Shares . One GDR's
Value may be on two or six shares
A trade bloc is a type of intergovernmental agreement, often part of a regionalintergovernmental
organization, where regional barriers to trade, (tariffs andnon-tariff barriers) are reduced or
eliminated among the participating states. Historic economic blocs include the Hanseatic League, a
trading alliance in northern Europe in existence between the 12th and 17th centuries and the
German Customs Union (Zollverein) initiated in 1834, formed on the basis of the German
Confederation and subsequently German Empire from 1871. Surges of trade bloc formation were
seen in the 1960s and 1970s, as well as in the 1990s after the collapse of Communism. By 1997,
more than 50% of all world commerce was conducted within regional trade blocs. [2]
Economist Jeffrey J. Scott of the Peterson Institute for International Economics notes that members
of successful trade blocs usually share four common traits: similar levels of per capita GNP,
geographic proximity, similar or compatible trading regimes, and political commitment to regional
organization

Q.5 Write down the differences between GATT and WTO. Explain the problems and
achievements of GATT & WTO.

ANS:-. The WTO is the GATT plus a lot more. There have been eight rounds of

trade negotiations since 1947. The first five rounds were of relatively short
duration and dealt mainly with tariff reductions. The sixth, the Kermedy Round
(1963-67), achieved deeper and wider tariff cuts, especially in industrial tariffs,
and brought developing country concerns to the fore.
The seventh, the Tokyo Round, which lasted six years (1973 1979), cut
tariffs substantially but also introduced a series of codes on non-tariff barriers
(NTBs). The WTO was the result of the eighth round of negotiations, known as
the Uruguay Round (1986-93).
The main differences between the GATT and the WTO are described by
the WTO as follows:
i. The GATT was provisional. Its contracting parties never ratified the General
Agreement, and it contained no provisions for the creation of an organisation.
ii. The WTO and its agreements are permanent. As an international
organisation, the WTO has a sound legal basis because all members have
ratified the WTO Agreements, and the agreements themselves describe how
the WTO is to function.
iii. The WTO has members. GATT had contracting parties, underscoring
the fact that officially the GATT was a legal text.
iv. The GATT dealt with trade in goods. The WTO deals with trade in services
and intellectual property as well.

v. The WTO dispute settlement system is faster and more automatic than the
old GATT system. Its rulings cannot be blocked.
vii. The WTO has introduced a trade policy review mechanism that increases
the transparency of members trade policies and practices.

WTO:
In the short period, the WTO has been in existence it is being credited
with the following achievements:
i. Greater market orientation has become the general rule;
ii. Use of restrictive measures for BOP problems has declined markedly;
iii. Services trade has been brought into the multilateral system and many
countries, as in goods, are opening their markets for trade and investment
either unilaterally or through regional or multilateral negotiations;
iv. Tariff-based protection has become the norm rather than the exception;
v. Many UDCs have undertaken radical trade, exchange and domestic reforms
which have improved the efficiency of resource use, opened up new
investment opportunities, and, thus, promoted economic growth;
vi. The trade policy review mechanism has created a process of continuous
monitoring of trade policy developments
The World Trade Organization (WTO) is an intergovernmental organization which
regulates international trade. The WTO officially commenced on 1 January 1995 under
the Marrakesh Agreement, signed by 123 nations on 15 April 1994, replacing the General Agreement
on Tariffs and Trade (GATT), which commenced in 1948.[5]The WTO deals with regulation of trade
between participating countries by providing a framework for negotiating trade agreements and a
dispute resolution process aimed at enforcing participants' adherence to WTO agreements, which

are signed by representatives of member governments[6]:fol.910 and ratified by their parliaments.[7] Most
of the issues that the WTO focuses on derive from previous trade negotiations, especially from
the Uruguay Round (19861994).
The WTO is attempting to complete negotiations on the Doha Development Round, which was
launched in 2001 with an explicit focus on developing countries. As of June 2012, the future of the
Doha Round remained uncertain: the work programme lists 21 subjects in which the original
deadline of 1 January 2005 was missed, and the round is still incomplete. [8] The conflict between free
trade on industrial goods and services but retention of protectionism on farm subsidies to
domesticagricultural sector (requested by developed countries) and thesubstantiation of fair trade on
agricultural products (requested bydeveloping countries) remain the major obstacles. This impasse
has made it impossible to launch new WTO negotiations beyond the Doha Development Round. As
a result, there have been an increasing number of bilateral free trade agreements between
governments.[9] As of July 2012, there were various negotiation groups in the WTO system for the
current agricultural trade negotiation which is in the condition of stalemate. [ General Agreement on

Tariffs and Trade. Treaty organization affiliated with the United Nations whose purpose was
to facilitate international trade. The primary actions of the organization were to freeze
and reduce tariff levels on various commodities. GATT was created in 1947, and was
originally intended to become a part of the International Trade Organization (ITO); however,
the ITO failed to be created, so the GATT was left as an independent organization. In 1994,
GATT was superseded by the WTO.
Q.6 Write the process of issuing letter of credit. Describe the different types of letter of credit.

ANS:- There are various types of letter of credit (LC) used in the trade transactions. Some of
them may be defined by their purpose. They are Commercial, Export / Import, Transferable and NonTransferable, Revocable and Irrevocable, Stand-by, Confirmed and Unconfirmed, Revolving, Back to
Back, Red Clause, Green Clause, Sight, Deferred Payment, and Direct Pay LC.
A letter of credit is an important financial tool in trade transactions. Both, domestic as well
as international market, trades use the letter of credit to facilitate the payments and the
transactions. A bank or a financial institution acts as a third party between the buyer and the seller
and assures the payment of funds on the completion of certain obligations.

DEFINITION OF LETTER OF CREDIT

A letter of credit is a financial document provided by a third party (with no direct interest in the
transaction), mostly a bank or a financial institution, that guarantees the payment of funds for goods
and services to the seller once the seller has submitted the required documents. Other financial
institutions to issue these letters of credit in addition to a bank are mutual funds or insurance
companies but in very few cases. A letter of credit has three important elements the beneficiary/

seller who is paid the credit, the buyer/ applicant who buys the goods or services and the issuing
bank that issues the letter of credit on the buyers request. There might be another bank involved
as an advising bank that advises the beneficiary.

TYPES OF LETTER OF CREDIT

There are various types of letters of credit used in the trade transactions. Some of the letters of credit
may be defined by their purpose. The following are the different types of letters of credit:

COMMERCIAL LC
A standard LC, also called as documentary credit.

EXPORT/IMPORT LC
The same letter of credit can be called export or import depending on who uses it. The exporter
will term it as an exporter letter of credit whereas an importer will term it as an importer letter of
credit.

TRANSFERABLE LC
A letter of credit that allows a beneficiary to further transfer all or a part of the payment to another
supplier in the chain. This generally happens when the beneficiary is just an intermediary for the
actual supplier. Such letter of credit allows the beneficiary to provide its own documents but
transfer the money further.

UN-TRANSFERABLE LC
A letter of credit that doesnt allow transfer of money to any third parties. The beneficiary is the
only recipient of the money and cannot further use the letter of credit to pay anyone.

REVOCABLE LC
A letter of credit that can be altered any time by the issuing bank or the buyer without any notification
to the seller/ beneficiary. Such types of letters are not used frequently as the beneficiary is not
provided any protection.

IRREVOCABLE LC
A letter of credit that does not allow the issuing bank to make any changes without the approval of
the beneficiary.

STANDBY LC
A letter of credit that is designed to assure the payment if something wrong happens. If the
beneficiary proves that the promised payment was not made, a standby LC becomes payable. It
does not facilitate a transaction but ensures the payment.

CONFIRMED LC
A letter of credit where an advising bank also guarantees the payment to the beneficiary. Only the
irrevocable letters of credit are confirmed by the advising bank. The beneficiary has two promises to
pay one from the issuing bank and the other from the advising bank.

UNCONFIRMED LC
A letter of credit that is assured only by the issuing bank and does not need a guarantee by the
second bank. Mostly the letters of credit are an unconfirmed letter of credit.

REVOLVING LC
A letter of credit used for several payments instead of issuing letters for each leg of the transaction.

BACK TO BACK LC
A letter of credit which is commonly used in a transaction including an intermediary. There are two
letters of credit, the first issued by the bank of the buyer to the intermediary and the second issued
by the bank of an intermediary to the seller.

RED CLAUSE LC
A letter of credit that partially pays the beneficiary before the goods are shipped or the services are
performed. The advance is paid against the written confirmation from the seller and the receipt.

GREEN CLAUSE LC
A letter of credit that pays advance to the seller just not against the written undertaking and a receipt,
but also a proof of warehousing the goods.

SIGHT LC
A letter of credit that demands payment on the submission of the required documents. The bank
reviews the documents and pays the beneficiary if the documents meet the conditions of the letter.

DEFERRED PAYMENT LC
A letter of credit that ensures payment after a certain period of time. The bank may review the
documents early but the payment to the beneficiary is made after the agreed-to time passes. It is
also known as usance LC.

DIRECT PAY LC
A letter of credit where the issuing bank directly pays the beneficiary and then asks the buyer to
repay the amount. The beneficiary may not interact with the buyer.
.