Chp9 Letter of Credit.ppt

1、Chapter NineLetter of Credit,Contents Introduction Language focus Writing guidance Practice Assignment,Letter of Credit -What is L/C? An L/C is the written promise of a bank that acts at the request and on the instructions of the applicant and undertakes to pay the beneficiary the amount specified i

2、n the credit, provided that the terms and conditions of the credit are observed by the beneficiary. (UCP600：Means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honor a complying presentation.指一项不可撤销的安排，无论其名称或描述如

3、何，该项安排构成开证行对相符交单予以承付的确定承诺。),Introduction to Letter of Credit,-Characteristics of a letter of credit The issuing bank has the primary liabilities for payment.The issuing bank undertakes to effect payment. The bank assumes a primary rather than a secondary liability. L/C is a self-sufficient instrumen

4、t.A letter of credit stands independent of the sales contract. It is simply a document transaction.The banks deal with documents and not with goods, services and/or other performances to which the documents may relate.,-Advantages of a letter of credit From the importers point of view deposit a marg

5、in in the bank as a security money obtain shipping documents representing the title of the good after he makes payment stipulate any required terms in the credit to reduce risks From the exporters point of view receive payment against the shipping documents when shipping the goods, no worry about di

6、fficulties in foreign exchange transfer,-Parties to an L/C Applicant or opener申请人 Beneficiary收益人 Issuing / opening Bank Advising bank通知行 Transmitting bank转递行 Confirming bank保兑行 Negotiating bank议付行 Paying bank付款行 Accepting bank承兑行 Reimbursing bank偿付行,Parties in the L/C 1 5 2 8 4 6 3 7,applicant,benef

7、iciary,Issuing bank,Paying bank,advising bank /negotiating,-Contents of a letter of credit Name and address of the issuing bank Type of the credit Name and address of the beneficiary Amount of the credit and its currency Expiry date of the credit and its place to be expired Name and address of the a

8、pplicant L/C number and date of issue Drawer and drawee as well as tenor of the draft,Description, quantity, unit price, specification, price terms, packing, shipping mark, etc. Full details of the documents to be presented commercial invoice（商业发票） marine bill of lading（海运提单） insurance policy or ins

9、urance certificate（保险单） certificate of origin（原产地证） inspection certificate（商检证） customs invoice（海关发票） air waybill（航空运单） railway consignment note（铁路运单）,Partial shipment permitted /not permitted Transshipment allowed/ not allowed Port of shipment and port of discharge Latest date for shipment and the

10、latest date for presentation of documents Instructions to the advising bank, negotiating bank or paying bank Other special terms and conditions The undertaking clause of the issuing bank The indication “This credit is subject to UCP600”,-Classification of letters of credit According to the attaching

11、 of documents Clean Credit Documentary credit According to the revocability of credit Revocable credit Irrevocable credit According to the adding of confirmation confirmed credit Unconfirmed credit,According to the time of payment Sight credit Usance or time credit According to the method of payment

12、 Payment credit（付款信用证） Available by payment with the issuing bank Available by payment with a third bank Available by payment with the advising bank Deferred payment letter of credit（延期付款信用证） Acceptance letter of credit（承兑信用证） Negotiation credit（议付信用证）,According to credit amount to be used revolving

13、ly Automatic revolving L/C Semi-Automatic revolving L/C Non-Automatic revolving L/C According to whether credit can be transferred or not Transferable credit Non-transferable credit,According to opening of credit relying on another credit Back to back credit（对背信用证） Counter credit or reciprocal credi

14、t（对开信用证） According to the combination of letter of credit with other methods of payment Letter of credit in combination with remittance Letter of credit in combination with collection,(1)Agreement to settlement by a letter of credit (2)Application for issuing a letter of credit (3)Opening a letter o

15、f credit (4)Notification, transmission or confirmation of a letter of credit (5) L/C amendment (6)L/C utilization and settlement,Procedure of the L/C,(1)Exporter urges importer to open a L/C; (2)Importer notices seller for the L/C; (3)Amendment of L/C; (4)Dispute arise in dealing with the L/C;,Objec

16、tives in L/C business,Aspects of L/C,Types of L/C Parties of L/C Procedure of Issuing L/C,出口商 （受益人） （债权人）,进口商 （开证申请人） （债务人）,出口地银行 通知/议付行,进口地银行 （开证行）,1签订贸易合同,轮船 公司,5发货,14货物,6提单,13提单,8 垫 款 议 付,7交单 要求 议付,4通知 信用 证,12付款 赎单,11通知 赎单,2申请 开证,3开立并寄出信用证,9寄单索汇,10偿付垫款,Translation,L/C (an L/C, Ls/C):-To instruct

17、the bank to open (issue) the L/C-This L/C expires on June 15th.-To urge to establish(establishment of) L/C-To check the L/C-To amend (the amendment of ) L/C-To extend (the extension of) L/C-The payment is to be made by confirmed, irrevocable -L/C, -The L/C stipulations are in exact accordance with t

18、he terms set forth in the contract.,Language Focus,上述（货物）： （ the goods） mentioned above/ the above mentioned （goods）/ the named（goods）/ the captioned （goods）/ the said （goods）/（the goods）in question/ the foregoing (goods) Contract: Keep / observe/ abide by/ bear in mind of a contract Perform/ in per

19、formance of a contract Breach/violate/ in violation of a contract Cancel /rescind a contract,In writing a letter of urging establishment of L/C, please be tactful: In the first letter of urging establishment of L/C, the seller should first state the fact that the goods ordered are ready for shipment

20、 but the relevant L/C has not yet been received and then express his hope that, upon receipt of this letter, the buyer will open the L/C immediately. If the first letter brings no reply, the seller should send out a second one to urge the buyer to open the L/C immediately. The second letter, though

21、still restrained, he may express disappointment and surprise.,Referring to your L/C No. AC-3 covering 2000 tons of steel shipped on 3rd Oct. the L/C was presented to us yesterday. Upon checking, we found the following discrepancies: It is regrettable to find the following discrepancies in your L/C,

22、please amend it. We appreciate your prompt attention.,关于要求改证的句型:,Thank you for your cooperation in promptly opening L/C. However, the L/C was presented a wrong printed figure, please instruct your opening bank to amend it as soon as possible, so that we can arrange an earlier vessel for shipment.,Pr

23、actices 1. 通常，我方只接受保兑的、不可撤销的即期信用证。 As a rule, we only accept confirmed irrevocable letter of credit payable by draft at sight. 我们很遗憾的告知贵方，我们直到今天才收到你方有关上述销售确认书的信用证。 We regret to inform you that we did not receive your L/C covering the above Sales Confirmation till today.,3. 必须在信用证规定的期间向开证行或保兑行（如果有）或任

24、何其他指定银行提交单据。 Presentment of documents must be made to the issuing bank or the confirming bank, if any, or any other nominated bank within the period specified in the credit. 由于供应商的延误，我们不能按信用证规定在6月30日之前发货，故请将信用证的船期和有效期分别延展1个月。 Owing to some delay on the part of our suppliers, we are not in a position

25、 to ship the goods before June 30 as stipulated in the L/C. Kindly extend the shipping date and credit validity for one month respectively.,1.We are writing to inform you that your L/C No.1234 opened_ Standard Chartered Bank should be amended_: 2.We have received your L/C No.336_ our Sales Confirmat

26、ion No. 4789. We find that the price terms CIF have been mistakenly indicated as CFR. Please refer _ the said contract and _ the amendment_. 3. The time of shipment is approaching. Please _ the L/C as soon as you can. 4. We consider it _ to make it clear that for future transaction CAD can only be a

27、ccepted if the amount _ is below US $ 3,000 or its _ in RMB _ the conversion rate then _.,5. According to the contract the blouses will be packed _ assorted colours. 6. We are glad to inform you that we have opened an irrevocable L/C No. 465 _ your favour _ US $ 4,000 _ Barclays Bank plc, London, _

28、until 3 December. 7. As the amount of the transaction is less than US $ 3,000, we wish to _ payment _ D/A basis. 8. The L/C authorizes you to _ at sight _ the Bank after shipment is made.,9. Goods _ Contract No. 112 were dispatched yesterday. 10. We have written to you _ two occasions in the last tw

29、o months _ the establishment of the relevant L/C. 11. _ examination of the credit, we find transshipment and partial shipments are not allowed. 12. Please _ shipment and validity of the L/C _July and August 20 _ with the amendment _us by June.,Please answer some basic questions concerning L/C: 1.Are

30、 you clear about the definition of L/C? 2.As we are fully aware that L/C has so many advantages, are there any limitations of an L/C? 3.Is the advising bank playing a role of advising only? 4.Are you clear about the procedure of a documentary L/C as well as the basic requirements in each step? 5.Are

31、 you clear about the contents of an L/C?,6.Whats the distinguish between a buyers time L/C and a sellers time L/C? 7.Since we do business with our buyers, If we need to ask for amendment of the L/C, can the buyer and seller make a discussion without the issuing bank directly? How can we do? 8.If we

32、are the seller under payment of L/C, can we present documents against an application for amendment from the buyer without receiving the original amendment advice from the bank?,我们的付款方式，一般是以保兑的，不可撤销的，以我公司为收益人的，按发票金额见票即付的信用证支付。该信用证应通过我们认可的银行开出。 Our usual mode of payment is by confirmed, irrevocable le

33、tter of credit, available by draft at sight for the full amount of the invoice value to be established in our favor through a bank acceptable to us.,翻译,2. 为了你方在你市场推销我方产品铺平道路，我方将接受即期付款交单方式付款，以示特别照顾. In order to pave the way for your pushing the sale of our products in your market, we will accept the

34、payment by D/P at sight as a special accommodation.,3. 尽管我方多次提醒，贵方至今尚未开立信用证。 In spite of our numerous reminders, you havent opened the letter of credit so far. 4.我们很遗憾的发现有些条款与合同中的条款不符。 However, we regret to have found that there are certain clauses which do not conform to those of the contract.,5. 第

35、268号合约项下的800辆自行车备妥待运已久，但至今我们尚未收到你们的有关信用证。请速开来，以便装运。 The 800 bicycles under Contract 268 have been ready for shipment for quite some time, but we have not yet received your covering L/C to date. Please open the L/C as soon as possible so that we may effect shipment.,6. 现通知，你方通过利物浦麦加利银行开出的有关我方第187号售货确

36、认书的信用证第H-15号刚刚收到。 经审阅其中条款，我们遗憾地发现某些地方与合同规定的条款不符，其不符之处如下： 1）佣金应是3，不是6 2）货物应于10月11月之间装运，不是10月30日或30日之前装运 3）货物按发票价值的110投保保险，不是150。,We are pleased to inform you that L/C No. H-15 issued by the Chartered Bank of Liverpool for our S/C No. 187 has just been received. However , on examining the clauses cont

37、ained therein, we regretfully find that certain points are not in conformity with the terms stipulated in the contract. The discrepancies are as follows: 1) Commission is 3%, not 6%. 2) Shipment is to be made during Oct./Nov. instead of “on or before 30th October”. 3) Goods should be insured for 110

38、% of the invoice value, not 150%,7. 由于供应商的延误，我们不能按信用证规定在6月30日之前发货，故请将信用证的船期和有效期分别延展1个月。 Owing to some delay on the part of our suppliers, we are not in a position to ship the goods before June 30 as stipulated in the L/C. Kindly extend the shipping date and credit validity for one month respectively

39、.,8. 收到你方789号信用证，谢谢。 经核对条款，我们遗憾地发现你方信用证要求2000年10月装运，但我方合约规定11月份装运。因此，务请把装运期和议付期分别展至2000年11月30日和12月15日。 请即办理展证事宜，并尽早电复。 We thank you for your L/C No.789, but on checking its clauses we find with regret that your L/C calls for shipment in October,2000, whereas our contract stipulate for November shipm

40、ent. Therefore, it is imperative for your to extend the shipment date to November 30, and negotiation date to December 15,2000 respectively. Please act promptly and let us have your cable reply the soonest possible.,Write a letter in English asking for amendments to the following letter of credit by

41、 checking it with the given contract terms.(20%) A. Copenhagen Bank Date: 4 January 2000 To: Bank of China, Beijing We hereby open our Irrevocable Letter of Credit No.112235 in favor of China Trading Corporation for account of Copenhagen Import Company up to an amount of GBP1,455.00 (Say Pounds Ster

42、ling One Thousand Four Hundred And Fifty-five Only) for 100% of the invoice value relative to the shipment of 150 metric tons of Writing Paper Type 501 at GBP97 per m/t CIF Copenhagen as per your S/C No. PO5476 from Copenhagen to China port. Drafts to be drawn at sight on our bank and accompanied by

43、 the following documents marked “X”:,(X) Commercial Invoice in triplicate (X) Bill of Lading in triplicate made out to our order quoting L/C No. 112235, marked FREIGHT COLLECT (X) One original Marine Insurance Policy or Certificate for All Risks and War Risk, covering 110% of the invoice value, with

44、 claims payable in Copenhagen in the currency of draft(s) Partial shipments and transshipment are prohibited. Shipment must be effected not later than 31 March, 2000. This L/C is valid at our counter until 15 April 2000.,附：PO5476号合同主要条款： 卖方：中国贸易公司 买方：哥本哈根进口公司 商品名称：写字纸 规格：501型 数量：150公吨 单价：CIF哥本哈根每公吨9

45、7英镑 总值：14,550英镑 装运期：2000年3月31日前自中国港口至哥本哈根 保险：由卖方按发票金额的110%保一切险和战争险 支付：不可撤销的即期信用证，于装运前1个月开到卖方，并于上述装运期后15天内在中国议付有效,Dear Sirs, While we thank you for your L/C No.112235, we regret to say that we have found some discrepancies. You are therefore requested to make the following amendments: 1. The amount b

46、oth in figures and in words should respectively read “GBP14,500”(Say Pounds Sterling Fourteen Thousand Five Hundred And Fifty Only); 2. “From Copenhagen to China port” should read “from China port to Copenhagen”; 3. The Bill of Lading should be marked “Freight Prepaid” instead “Freight Collect”;,4.D

47、elete the clause “Partial shipments and transshipment prohibited”; 5. “This L/C is valid at our counter” should be amended to read “This L/C is valid at your counter”; Please confirm the amendments by fax as soon as possible. Yours sincerely,B. LONDON BANK Irrevocable Documentary Credit No.: LST150

48、Date and place of issue: 15th September 2001, London Date and place of expiry: 15th December 2001, London Applicant: London Imp. Co., Ltd. Beneficiary: South Export Corp., Guangzhou Advising bank: Bank of China, Guangzhou Branch Amount:GBP10,000 (Say G Pounds Ten Thousand Only) Partial shipments and

49、 transshipment are prohibited. Shipment from China port to London, latest 30th November 2001.,Credit available against presentation of the following documents and of your draft at sight for 90% of the invoice value: Signed commercial invoice in quadruplicate. Full set of clean on board ocean Bills o

50、f Lading made out to order of London Bank marked freight prepaid. Insurance certificate or policy endorsed in blank for full invoice value plus 10%, covering All Risks and War Risk. Covering 5m/t Fresh Shrimps, first grade, at GBP2000 per m/t CIF London as per Contract No. 245B.,245B号合同主要条款： 买方： 伦敦食

51、品进口有限公司 卖方：广州南方出口公司 5公吨一级冻虾每公吨CIF伦敦2200英镑，2001年11月30日前中国港口用直达轮运往伦敦。保险由卖方按发票金额的110%投保一切险和战争险。 凭不可撤销的即期信用证支付。,Dear Sirs, We have received the above mentioned L/C against our Contract No.245B. after checking the L/C carefully, we have found a number of discrepancies and would request you to make the fo

52、llowing amendments: 1.The place of expiry should be China instead of London. 2.The correct name of the applicant is “London Food Imp. Co. Ltd”, not “London Imp. Co., Ltd.” 3.Please increase the unit price to GBP2200 per m/t and the total amount both in figure and in words to “GBP11000”(Say Sterling

53、Pounds Eleven Thousand Only).,4.Amend the clause “Partial shipments and transshipment are prohibited.” to read “Partial shipments are allowed. Transshipment is prohibited. 5.“your draft at sight for 90% of the invoice value” should be amended to read “your draft at sight for 100% of the invoice valu

54、e”. 6.The contracted goods is “Frozen Shrimps”, not “Fresh Shrimps”. We hope you will send us your amendment advice without any delay so as to enable us effect shipment in time. Yours faithfully,C. HUA CHIAO COMMERCIAL BANK LTD. 88-89 Des Voeux Road, Central, Hong Kong Irrevocable Documentary Credit No. F07567 Date and place of issue: September 28, 1995 Hong Kong Date and place of expire: November 30, 1995Hongkong Applicant: J. Brown & Co., 175 Queens Way, Hong Kong Beneficiary: Liaoning Textiles I/E Cor