信用证和银行保函

LetterofCreditLetterofGuarantee

CombinationofPaymentModes

Chapter13LetterofCreditandLetterofGuarantee

Definition

PartiesInvolved

ProceduresofL/CPayment

NatureandCharacteristicsContents

Types

Lesson1LetterofCreditDefinition

“Anyarrangement,howevernamedordescribed,wherebyabankactingattherequestandontheinstructionsofacustomeroronitsownbehalf,istomakeapaymenttoortotheorderofathirdparty,oristoacceptandpaybillofexchangedrawnbythethirdparty”.

--fromtheUCP600

Lesson1LetterofCreditPartiesInvolved

Opener,ApplicantIssuing/OpeningBankBeneficiaryAdvising/NotifyingBankNegotiatingBankPaying/DraweeBankReimbursingBankConfirmingBankLesson1LetterofCreditProceduresofL/CPaymentApplicationforL/C

IssuanceofL/C

AdviceofL/C

L/CVerificationandModification

PresentationandNegotiation

HonorandPayment

Lesson1LetterofCreditNatureandCharacteristicsNature

Characteristics

FormsofOpeningLetterofCredit

Lesson1LetterofCreditReverseRemittance

BankCreditNatureOpeningbankundertakingtheresponsibilityofthefirstpayer

Anindependentinstrument

Akindoftransactionofdocuments

CharacteristicsOpenbyAirmail

OpenbyCable

SWIFT

FormsofOpeningLetterofCreditContents

GeneralInformationofL/C

InformationRequiredontheDraft

DescriptionoftheGoods

ShipmentClauses

Documents

SpecialClause

Bank’sPromiseofPayment

ADeclarationtoSubjecttoUCP600

Lesson1LetterofCreditTypes

IrrevocableL/C

SightL/C

UsanceL/C

TransferableL/C

RevolvingL/C

ReciprocalL/C

BacktoBackL/C

StandbyL/C

ConfirmedandUnconfirmedL/CSoftClauseL/C

Lesson1LetterofCreditDefinition

Types

Lesson2LetterofGuaranteeDefinitionLetterofGuaranteeisaguarantyinwrittenformissuedbybank,insurancecompany,guaranteecompanyorindividualuponrequestoftheapplicant,promisingtofulfillthepaymentorcompensationtosomeextentinacertainamountofmoneyincasethattheapplicantfailstofulfilltheobligation.Lesson2LetterofGuaranteeTypes

TenderGuaranteePerformanceGuaranteeRepaymentGuarantee

Lesson2LetterofGuaranteeTenderGuaranteeAtenderguaranteemeansbank,insurancecompanyorotherinvolvingparty(guarantor)makespromisetobeneficiary(tenderee),sometimesaccordingtotheinstructionoftheauthorizedbankbytheguaranteeapplicant,thatguarantorshallfulfillpaymentwiththestipulatedsumincasethatapplicant(tender)failstofulfilltheobligationresultedfromhistender.

PerformanceGuaranteeAperformanceguaranteeisapromisemadebyaguarantor,thataguarantorwillmakepaymenttobeneficiarywiththeagreedsumincasethatguaranteeapplicant(contractor)failstofulfillthecontractconcludedbybeneficiary(owner)andcontractor.RepaymentGuaranteeRepaymentguaranteeisaguaranteeissuedbybank,insurancecompanyorotherinvolvingpartyuponrequesttheapplicationofonepartyofacontracttotheotherpartyofacontract.Itisstipulatedintherepaymentguarantee,thatthebankiscommittedtomakingreimbursementincasethattheapplicantfailstofulfilltheobligationagreedinthecontract,notreturningorrepayingthedepositorpaidamounttothebeneficiary.CombinationofLetterofCreditandRemittance

CombinationofLetterofCreditandCollectionCombinationofCollectionandStandbyL/CorL/GCombinationofRemittance,CollectionandL/CLesson3

CombinationofPaymentModesCombinationofLetterofCreditandRemittance

ItmeansthatthepaymentispartiallymadebyL/Candthebalanceispaidbyremittance.Forexample,forthetransactionofores,bothpartiesmayagreethatXXpercentoftheinvoiceamountispaidbyL/Cwithpresentationoftheshipmentdocuments,thebalanceispaidbyremittanceaccordingtothegoodsinspectionresultandtheactualqualityorweightafterthearrivalofthegoods.

Lesson3

CombinationofPaymentModesCombinationofLetterofCreditandCollection

ItmeansthatthepaymentismadepartiallybyL/Candthebalancebycollection.Itisusuallyoperatedinthewayasfollows,twobillsofexchangeareissuedunderthecredit,thepaymentbyL/CismadewiththecleandraftandthepaymentbycollectionismadebysightortimeD/Pwiththepresentationofthefullsetofdocuments.Forthesakeofsafety,theclausesuchas“thedocumentsdelivereduponthefullpayment”mustbestatedintheletterofcredit.Lesson3

CombinationofPaymentModesCombinationofCollectionandStandbyL/CorL/G

Topromoteitsproducts,thesellermayadoptthecollectioncombiningwithL/G,whichisinfavorofthebuyeraswellasavoidingrisks.ThespecificoperationisthattheexportermaycollectthepaymentfromthebankwithcleanbillandL/GafterreceivingthestandbyL/CandL/Gcomplyingwiththecontract.Lesson3

CombinationofPaymentModesCombinationofRemittance,CollectionandL/CPaybyInstallmentsWiththepaymentbyinstallments,thepaymentissettleduponthegoodsaredeliveredtothebuyer.Withoutinterestsinvolvedinthetransaction,tosomeextent,thesellermakesuseofthecapitalofthebuyer.

DeferredPaymentWiththispaymentterm,mostofpaymentwillbepaidinthefutureyearsorbyinstallmentwithinalongfutureperiodafterthegoodsaredeliveredtothebuyer.So,thetransactionisacreditsalewiththebuyerutilizingthecapitaloftheseller,sotheinterestsshallbeaddedtopriceofgoods.Lesson3

CombinationofPaymentModesCaseStudy

Case1Case2Case3Case4Case1:

AChineseexporterreceivedonesetofirrevocableL/CfromabroadwiththeChinabranchofaforeignbankastheadvisingbankandconfirmingbank.Aftertheshipment,atthetimethattheexporterwastopresenttheshipmentdocumentstothebankfornegotiation,theexporterwassuddenlynotifiedbytheforeignbankthatthebankwouldnotacceptthenegotiationofthedocumentsandmakepaymentsincetheissuingbankhasdeclaredbankcorruption,buttheforeignbankagreedtomakecollectionagainstthebuyerwiththenominationoftheexporter.Whatdoyouthinkofit?Pleasegiveanexplorationinbrief.Case2:

AChineseexporterreachedacontractwithaUKbuyeraboutsomecommoditiesinalargequantityintermsofCIFandirrevocablesightL/Cpayment,stipulatingtheshipmentshallbeeffectedinNovemberinthecontract,butnospecificL/Cissuingdatementionedtherein.Later,theUKbuyerdelayedtheissuanceofL/Cbecauseofthedecreaseofmarketpriceofthecommodity.Toavoidthedelayoftheshipment,theexporterhadurgedthebuyertoissueL/CformanytimessincethemiddleofOCT.,thebuyerfinallyissuedtheL/Cupto8thNov.However,itistoolatefortheexportertoarrangefortheshipmentasscheduled,whothereforerequiredthebuyertoextendtheshipmenttimeandtheL/Cnegotiationexpirydateforonemoremonth.TheUKbuyerrefusedtherequirement,andcancelledthecontractunilaterallyexcusingthattheexporterfailedtoeffectshipmentontime.Theexporterdidnothingbutacceptedit.Pleasemakeanalysisandcommentaboutit:Hadtheexportersettledthematterinaproperway?Andwhatlessonsweshalllearnfromit?

Case3:

AnexportermakesanoffertoaJapaneseclientintermsofpaymentbyD/Patsight,andtheclient’sreplyisthattheofferisacceptableintermsofthepaymentbyD/Pinsightof90daysandcollectionbyBankAnominatedbytheclient.PleasemakeananalysisofthereasonwhytheJapaneseclientbringsabouttherequirement.Case4:

InabusinesstalkbetweenaChineseexporterandaHKbuyerinatradefairabouttheexportofsneakers,theHKbuyerclaimedthattheimportquotaisneededasthefinaldestinationofgoodsisUSA,whiletheexpirytimeofthequotaownedbythebuyerisattheendofJune,sotheshipmentmustbemadebytheendofJuneotherwisetheHKbuyerhastotakeresponsibilityofcontractbreach.Asthetermofthecontract,theexporterwasrequiredtopayUSD300000asaguarantydeposit,andtheclientpromisedtoissueanirrevocableL/Cfromawell-knownHKbank.Theexporteroverlookedtheclausesaying”oneshipmentapprovalcertificatesignedbytheL/Capplicantmustbepresentedwithshipmentdocuments”inthecreditwhenitreceivedtheL/C.Whentheexportermadepresentationofshipmentdocumentstothebank,theexporterwasawareofthetermandrequiredtheHKbuyertocanceltheclauseorissuetheconcerningcer