Payment Attachment in foreign trade practice is a risk control or legal enforcement measure whereby the buyer or a third party (such as a bank or court) temporarily freezes or withholds payment owed to the seller based on contractual terms, arbitration awards, or court orders, until specific conditions are met or the dispute is resolved. Common scenarios include: the buyer deducting payment due to non-conforming goods or delayed delivery; the bank temporarily withholding funds due to discrepancies in the letter of credit; the court preserving the seller's accounts receivable due to debt disputes. Unlike 'Refusal to Pay,' attachment usually has a legal or contractual basis, and the funds may ultimately be paid. Unlike 'Withholding Tax,' attachment does not involve taxation but is a commercial or judicial act. Precautions: Sellers should clarify deduction clauses in the contract, retain performance evidence, and promptly raise objections or seek legal remedies against improper attachment; buyers should avoid abusing the right of attachment, which could lead to breach of contract.
📝 Examples
1. Because the buyer claimed quality defects in the goods, the bank attached the payment under the letter of credit for the order based on a court injunction; the seller needs to provide a quality inspection report to apply for release of payment. (Note: Judicial attachment scenario, emphasizing legal procedures.)
2. The contract stipulates that if the seller delays delivery by more than 15 days, the buyer has the right to attach 10% of the payment for the corresponding order as liquidated damages until both parties reach a compensation agreement. (Note: Contractual attachment, commonly seen in performance guarantee clauses in foreign trade sales contracts.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner