Who pays for legal and banking fees in an export transaction?
The final customer in the foreign market ultimately pays legal and banking fees. However, they are usually handled differently in the invoicing process. (1) Legal fees are estimated in advance by the exporter and are included in the purchase price. They may include legal counsel to: • Review contracts • Ensure compliance with export licensing requirements • Protect the exporter against violation of intellectual property rights. Legal fees are paid by the seller and the buyer does not know the estimated amount for these fees. (2) Banking fees are usually known in advance of the sale and are added to the price quotation/proforma invoice to the buyer as a separate item. They are usually for processing of shipping and financial documents. Banks act as financial intermediaries between the buyer and seller in export transactions. The buyer knows the amount of the banking fees prior to placing the order. (Source: The Export Institute USA, Ask the Experts, Category Five.
