Letter of Credit

1、2022-7-6Chapter 3 Urging Establishment of L/C2022-7-6Documentary Letter of Credit (L/C)lA documentary L/C is an agreement with banks, made by an importer, to pay an exporter, provided certain conditions are fulfilled.lThe importers apply to one of their bankers to issue the L/C in favor of their sup

2、pliers through a bank in the suppliers country.2022-7-6Key termsldocumentary L/C 跟單信用證跟單信用證l The importer avoids risk of the sellers default to deliver goods, because the payment is made to the seller only after documents certifying goods delivery are produced. 2022-7-62022-7-62022-7-6Further Operat

3、ion of an L/Cl5. The seller, after getting the L/C, effects shipment of the ordered goods, and then goes to a negotiating bank (議付行議付行) for his proceeds (貨款貨款) by presenting the necessary shipping documents. (Sometimes the advising bank can act as the negotiating bank.)2022-7-6Further Operation of a

4、n L/C Further Operation of an L/Cl6. After making payment, the negotiating bank send the shipping documents to the issuing bank and at the same time asks for the reimbursement (付還付還) of the money it has paid to the seller as proceeds.2022-7-6Further Operation of an L/Cl7. The buyer reimburses the pa

5、yment by the issuing bank and gets from it the shipping documents.l8. The buyer finally takes delivery with the shipping documents.2022-7-6lIf the importers wish to guarantee payment of the L/C, they will ask their banker to issue an irrevocable （不可撤銷（不可撤銷的）的） one. An irrevocable L/C is one which th

6、e issuing bank can not revoke without consent from the exporter. This means the credit cannot be exchanged without the exporters and bankers agreement. irrevocable L/C2022-7-6Documentary Letter of Creditthe beneficiary should attach all shipping documents required. 2022-7-6Documentary Letter of Cred

7、itlIf, in addition, the importers want the advising bank in the sellers country to guarantee the L/C, they will request confirmation by the advising bank. The L/C then becomes a confirmed irrevocable L/C (保兌的不可撤消的信用證保兌的不可撤消的信用證 ). 2022-7-6Confriming bank (保兌銀行)lWhen an L/C is confirmed by another ba

8、nk in addition to the issuing bank, both the two banks are responsible for the payment to the beneficiary. This double-gurantee L/C is the safest protection of the exporters interest. In usual practice the confirming bank is th advising bank or a bank with very high reputation. 2022-7-6Documentary L

9、etter of CreditlUse of documentary credits is subject to Uniform Customs and Practice (UCP) for documentary credits (跟單信跟單信用證統(tǒng)一慣例用證統(tǒng)一慣例), brochure of the I.C.C.（International Chamber of Commerce 國(guó)際商會(huì)國(guó)際商會(huì)/）. Most banks worldwide adhere to these rules. 2022-7-6All letters of credit

10、 contain these elements:la payment undertaking given by a bank (issuing bank) lon behalf of a buyer (applicant) lto pay a seller (beneficiary) a given amount of money lon presentation of specified documents representing the supply of goods lwithin specified time limits lthese documents conforming to

11、 terms and conditions set out in the letter of credit ldocuments to be presented at a specified place 2022-7-6Sample Letter of Credit2022-7-6Buyers obligationlWhen a transaction is concluded, the buyer as a rule is under obligation to establish / open (開(kāi)立開(kāi)立) a letter of credit whit his bank within t

12、he time stipulated in the sales contract or sales confirmation. 2022-7-6Buyers obligationlIt is the usual practice in our export trade that the letter of credit is to be established and to reach the seller one month prior to the date of shipment to give the seller ample time to make preparations for

13、 shipment, such as making the goods ready and booking shipping space. 2022-7-6The need to urge establishment of L/ClIf the buyer fails to establish the letter of credit, or the letter of credit does not reach the seller in time, a letter or a fax, has to be sent to the buyer to urge them to expedite

14、 the L/C or to ascertain its whereabouts. Messages urging establishment of letter of credit must be written with tact. Their aim is to persuade the buyer to cooperate more closely and in fact to fulfill his obligations 2022-7-6Difficult Wordslexpedite: to speed up the progress of加速加速 e.g. The builde

15、rs promised to expedite the repairs.建筑商答應(yīng)加速修理。建筑商答應(yīng)加速修理。lascertain: to discover with certainty, as through examination or experimentation. 查明，弄清查明，弄清：e.g. We must ascertain the usual customs of the local people and arrange accordingly.我們必須了解當(dāng)?shù)厝嗣竦娘L(fēng)俗習(xí)慣我們必須了解當(dāng)?shù)厝嗣竦娘L(fēng)俗習(xí)慣,作出相應(yīng)作出相應(yīng)安排。安排。lwhereabouts: approx

16、imate location大概所大概所在地在地e.g. Her whereabouts are still unknown.她在她在什么地方還沒(méi)人知道什么地方還沒(méi)人知道2022-7-6Patterns and Substitutions1. With reference to the 4,000 dozen shirts under our Sales Confirmation No. TE151, we wish to inform you that the date of delivery is approaching but up to the present we have not

17、received the covering L/C.關(guān)于第TE151號(hào)銷售確認(rèn)書項(xiàng)下的4000打襯衫，我們希望通知你方，交貨日期迫近，但是到目前我們?nèi)詻](méi)有收到有關(guān)的信用證。2022-7-6Patterns and Substitutionsl2. The goods under S/C No. 3697 have been ready for quite some time. Please have the Letter of Credit opened with the least possible delay.第3697號(hào)合同項(xiàng)下的貨物早已備妥，請(qǐng)盡快開(kāi)立信用證。2022-7-6Patte

18、rns and Substitutionsl3. With reference to our Sales Confirmation No. 7904 of March 12, 2005, we regret to say that your letter of credit has not yet reached us to the time of writing. 關(guān)于我方2005年3月12日第7904號(hào)銷售確認(rèn)書，我們很遺憾地告知你方，直到寫這封信時(shí)信用證還未收到。2022-7-6Patterns and Substitutionsl4. Please do your utmost to

19、expedite the establishment of the L/C so that we may execute the order within the prescribed time.請(qǐng)盡快開(kāi)出信用證以便我們能在規(guī)定的期間內(nèi)執(zhí)行訂單。2022-7-6Patterns and Substitutionsl5. We are sorry that we could not ship the goods by a May vessel only because of the delay of your L/C. Please open the said L/C as soon as po

20、ssible.我們很遺憾，因?yàn)槟惴叫庞米C耽誤，我們的貨不能裝5月份的船。請(qǐng)盡快開(kāi)立上述信用證。2022-7-6Patterns and Substitutionsl6. Your delay in opening the L/C has caused us much inconvenience as we have already made preparations for shipment according to the stipulations of the said Sales Confirmation.你方開(kāi)證的耽擱給我們?cè)斐芍T多不便，因?yàn)槲覀円呀?jīng)按照上述銷售確認(rèn)書的規(guī)定做好了裝運(yùn)準(zhǔn)

21、備。2022-7-6Patterns and Substitutionsl7. In order to avoid subsequent amendments, please see to it that the L/C stipulations are in exact accordance with the terms of the contract.為了避免隨后的修改，請(qǐng)注意信用證的規(guī)定要完全符合合同條款。2022-7-6Patterns and Substitutionsl8. In spite of our repeated requests, we have not receive

22、d your letter of credit up to now. Please open the L/C immediately, otherwise we can not effect shipment in January.盡管再三催請(qǐng)開(kāi)證，信用證仍未收到，請(qǐng)立即開(kāi)證，否則不能在一月份裝運(yùn)。2022-7-6Practicel2,000 sets of sewing machines under Contract No. 123 have already been ready for shipment, but you have not received the covering let

23、ter of credit. Write a letter to urge the buyers establishing the L/C.2022-7-6Patterns and Substitutionsl9. We request you to have L/C No. H2284 amended as follows: l(1) Extend the time of shipment till May 31.l(2) Extend the validity of the L/C till June 15.請(qǐng)對(duì)H2284號(hào)信用證作如下修改：（1）將交貨期展至5月31日。（2）將有效期展至

24、6月15日。2022-7-6Patterns and Substitutionsl10. Your L/C No. 5466 calls for shipment in two equal monthly lots while S/C No. 1101 stipulates shipment in a single lot to be made not later than September 1. Please amend accordingly.第5466號(hào)信用證規(guī)兩批裝運(yùn)，每月一次，每次數(shù)量相等，而1101號(hào)合同規(guī)定9月1日之前一次裝運(yùn)，請(qǐng)對(duì)信用證作相應(yīng)修改。2022-7-6Patter

25、ns and Substitutionsl11. Please amend L/C No. 4776 as follows:l(1) Amount is to be increased by RMB 506 yuan.l(2) The words “12 dozen per carton” are to be replaced by “20 dozen per carton”.請(qǐng)對(duì)4776號(hào)信用證作如下修改：（1）金額增加人民幣506元。 （2）“每箱裝12打”改為“每箱20打”。2022-7-6Patterns and Substitutionsl12. Your Letter of Cre

26、dit No. 660 stipulates 60 days after sight, whereas our contract shows 30 days after sight, so you are requested to make necessary amendment to the L/C and advise us before December 3.你方信用證第660號(hào)規(guī)定60天期票，而合同規(guī)定30天期票。請(qǐng)對(duì)信用證作必要修改，并于12月3日前告知我公司。2022-7-6Patterns and Substitutionsl13. Please amend your L/C No. 137 as allowing transshipment and partial shipments.請(qǐng)將第137號(hào)信用證修改為允許轉(zhuǎn)船和分批裝運(yùn)。2022-7-6Patterns and Sub