国际贸易英语信用证Letter of Credit.ppt

1、Unit 4 Execution of the Contract,Terms of Payment:,L/C Collection (D/P and D/A) Remittance Open account Cash in advance,Terms of Payment:,Collection: 托收 The exporter authorizes the bank to collect the money from the importer. 出口人委托银行向进口人收取货款 D/P: documents against payment 付款交单 D/A：documents against

2、acceptance 承兑交单,Terms of Payment:,Remittance 汇付 The buyer himself remits money to the seller through b/c. Mail transfer 信汇 Telegraphic transfer 电汇 Demand transfer 票汇 Note: Only when the transactions are very small and the finance involved is small too.,1. L/C: Definition,RESONS OF USING L/C： ： forei

3、gn credit reports are often sketchy and do not give the right information. The country in which the foreign importer is located may be in a weak financial position. Importer is reputable, conditions beyond his control prevent him from fulfilling his obligation.,1. L/C: Definition,Generally: a docume

4、ntary letter of credit is defined as instrument by which a bank promises to pay the seller for his goods providing the seller conform exactly to the condition laid down in the L/C,1. L/C: Definition,Specifically: it is an arrangement, whereby the buyer requires his bank to establish a credit in favo

5、r of the seller. The buyers bank undertakes, or authorizes its correspondent bank in the exporters country, to pay the exporter a sum of money against presentation of specified shipping documents.,1. L/C: Definition,Advantages: Security of payment to the exporter. Enable the buyer to ensure that he

6、received the goods as ordered.,L/C: Parties involved,: applicant 申请者 The party who applies for the opening of L/C, usually importer. : opening bank 开户行 Which opens the L/C upon the request of the importer. It is responsible for the payment of the goods.,L/C: Parties involved,: advising bank 通知银行 Usu

7、ally the correspondent of issuing bank 开证行代理行 The bank in the exporters country who informs the exporter that a L/C has been opened in his favor, and transfer the L/C to the exporter.,L/C: Parties involved,: beneficiary 受益人 Usually the exporter, who is entitled to receive the L/C for the payment of

8、the goods. : negotiating bank 议付银行 The bank who buy an exporters draft submitted to it under a L/C and then forward the draft and documents to the opening bank for reimbursement. Usually is the advising bank.,L/C: Parties involved,: payment bank Usually the opening bank or a third bank designated ba

9、nk, makes payment to the beneficiary against presentation of stipulated documents. : confirming bank 保兑行 The bank which is requested to add its own commitment to the L/C, USUALLY the advising bank.,L/C: chief contents,the parties involved Remarks of the l/c, the No.,type, date, etc. The clauses of t

10、he bill of change, such as the amount of bill, drawer and drawee, the paying date the amount of L/C the clauses about the documents, description of the goods,L/C: chief contents,guarantee clauses of the opening bank, which testifies that the opening bank will hold itself responsible for the payment

11、to the beneficiary or the holder of the drafts. Particulate clauses,L/C: procedures,The importer applies to the issuing bank for the L/C application form: restatement of the clauses of the sales contract The L/C is drawn by the issuing bank. The advising bank informs the seller of the arrival of L/C

12、,L/C: procedures,The beneficiary check the L/C, he should mainly focus on : The shipping date The time of validity of L/C Quantity of goods and amount of payment The address of the beneficiary The price term, loading and unloading ports Insurance clauses The consignee of the B/L Packing description

13、of the goods,L/C: procedures,When the seller has made sure there are no more problems, he should make the delivery of the goods and then comes to negotiating bank for negotiation. Having effected the payment to the negotiating bank, the paying bank then presents the documents to the buyer upon his p

14、ayment of the amount of the due or acceptance of the draft. With the documents the buyer can get the delivery of the goods.,L/C: classifications,Revocable / irrevocable L/C Confirmed/unconfirmed L/C Sight L/C and usance L/C Transferable /non transferable L/C Revolving L/C Back to back L/C Red clause

15、 credits Standby L/C,L/C: True or false exercises,Under l/c, the money of the bank is used for the settlement of the payment in international trade. The opening bank is usually a bank where the exporter keeps an account. The negotiating bank must be designated in the L/C The paying bank can claim its payment back by exercising the right of recourse.,L/C: True or false exercises,An advising bank is usually located in the country of the