In the process of implementing letters of credit, we often encounter various problems with letters of credit from abroad. Today, I will take some time to summarize and talk about my personal feelings。
一、What's the latest shipment date of L/C?
A: Generally 2 weeks after the expected date of shipment, for example, for example, the expected date of shipment is: 12, 10, 2016, then the letter of credit is best written on December 24, 2016, if the foreign consignee does not have very strict requirements on the date of shipment, you can do so。In this way, it can avoid the revision of the certificate due to special reasons, which can not catch up with the expected date of shipment, and the resulting revision fee, as well as the delay of the next shipment due to waiting for the result of the revision。
二、What is the validity period of the letter of credit?
A: If you are the applicant，And the latest shipment date stipulated in the letter of credit is June 15th，那么，The validity of a letter of credit is generally one or two days after the date of presentation，For example, you stipulate that the delivery time is 15 days after the bill of lading，那么，The validity of the letter of credit may be stipulated as 1 July or 2 or 3 July, because，If the beneficiary shipped on June 15，Then according to the 15 days delivery time stipulated in the L/C，The beneficiary must present the documents by 30 June at the latest，那么，The letter of credit is valid until 1st, 2nd and 3rd July，That is, the expiry date of the letter of credit is the date beyond which the beneficiary cannot present the document，Since June 30 is already the deadline for submission of documents，，Any subsequent presentation of documents on 1, 2 or 3 July does not comply with the provisions of the L/C;If you don't specify the time of delivery，The validity of the letter of credit can be extended to 7 July or 8, 9, 10 July，That is, if there is no specified time for presentation，The beneficiary must present the documents not later than 21 days after the date of the bill of lading，That is, the beneficiary should deliver the documents by July 6th at the latest。Because there is no point in giving a longer period of time for the presentation of a letter of credit
三、 How to charge for discrepancies in L/C?
A: The correction fee of the letter of credit is calculated according to the discrepancy，Discrepancies are not counted according to the number of discrepancies，It is based on the number of documents submitted，Any discrepancy in a document，You'll be charged a discrepancy fee，The amount is as stated in the letter of credit，There is usually a clause in the letter of credit that specifies the fee for the amendment，And state that it will be paid by the seller，It's usually around 50 dollars。
四、Why are there discrepancies in the L/C documents?
Answer: Because the payment under the letter of credit is conditional on the conformity of the documents, the accuracy of the documents determines the smooth recovery of the export payment or not, and in practice, the reimbursement of the payment with the correct documents can only account for a few percent of the entire letter of credit transaction。Some time ago, foreign made a survey, the results said that 70%-80% of the documents in the first delivery of documents there are discrepancies, few letters of credit under the next delivery of documents can be pointed out。
五、Under what circumstances is a confirmed letter of credit usually needed?
答：1.The country where the issuing bank is located is in economic turmoil, and the issuing bank is in danger of bankruptcy
2.Issuing bank itself credit is not good, or poor strength
六、 What are the reasons why L/C payment is not suitable for air freight?
A: 1, the air time is short, the goods arrive at the airport soon, the consignee does not need the bank to hand over the documents, you can handle the import and delivery procedures at the airport with your identity as the consignee。
2. After the goods are mentioned in the hand, the consignee can find reasons to refuse to pay the documents transferred by the bank, and the risk of payment recovery is great。
Summary: This mode of air transport will only be used when the domestic shipper fully trusts the foreign consignee, and it should be used with caution if it is only a general cooperative relationship at home and abroad。
七、What is the reason for sending documents to the reimbursing bank in 2 (2Lots)?
A: ALLDOCUMENTSTOBEDESPATCHEDTOHATTONNATIONALBANKPLC.,
NUGEGODABRANCH,181,HIGHLEVELROAD,NUGEGODA,SRILANKA,
INTWOLOTSBYCOURIER.
Because foreign customers are worried that the express will be lost, for the sake of insurance, it is divided into 2 parts to send。
BENEFICIARYTOSENDASETOFCOPYDOCUMENTSTOAPPLICANTWITHIN07DAYSFROMTHEDATEOF (to BENEFICIARYTOSENDASETOFCOPYDOCUMENTSTOAPPLICANTWITHIN14DAYSFROMTHEDATEOF，Because the forwarder is issuing the bill of lading now，And send it to us，It takes about a week，In this way, we cannot guarantee that we can send copies of the full set of documents abroad within 7 days。)
SHIPMENT,BYCOURIER.BENEFICIARYSCERTIFICATETOTHISEFFECTALONGWITHTHECOURIERRECEIPTTOACCOMPANYORIGINALDOCUMENTS.
WITHIN15DAYSAFTERSHIPMENTDATE (to WITHIN21DAYSAFTERSHIPMENTDATE，Because of the above reasons plus the following reasons: we submit documents to our bank，Our bank will review the documents upon receipt，Then give suggestions for modification，Bank working days about 3-4 working days，Then we modify the presentation again，It may take 1-3 business days，Some special documents also need time，If it is specified to hand over a single phase within 21 days, the grip will be capitalized。)
ASALLBANKCHARGESOUTSIDESRILANKAINCLUDINGREIMBURSINGCHARGESAREFORTHEACCOUNTOFAPPLICANT (normally，If foreign buyers are not particularly opposed，We can have their letter of credit open that way，This saves bank fees incurred by the seller。)
八、Then what is a transferable letter of credit?
A: Transferable credit means that the issuing bank clearly indicates the words "transferable" in the credit，Authorizing its beneficiary may require the designated cashing bank of the certificate to act as a "transferring bank"，Or when the credit is free to negotiate，A specially authorized transferring bank may be requested in the certificate，A credit that transfers the credit in whole or in part to one or more new beneficiaries.
There are many reasons for the use of transferable letters of credit in trade: importers entrust middlemen to purchase goods，But the latter does not want to reveal its trading relationships and profits，They also want to reduce the burden of deposit and fees required for issuing new certificates;Or an importer placing a bulk order with a large foreign company，The latter shall be delivered separately by its semicolons or joint numbers scattered at each port.For importers，A letter of credit is riskier when it is transferable than when it is non-transferable，Because under a transferable letter of credit，Importers only deal with middlemen，Do not know the actual supplier situation，As long as the middleman can submit documents in accordance with the provisions of the credit，The issuing bank has to pay on time，Even a usance letter of credit，But when the goods arrived, they were found not in conformity with the regulations，The issuing bank cannot refuse payment，所以，Importers should be careful to open transferable letters of credit in their business。
九、What is a back-to-back letter of credit?
A: This letter of credit is also known as a subordinate letter of credit or a transfer letter of credit, and the bank that issued the letter of credit against it is also known as the second issuing bank。The beneficiary of the counterbacking letter of credit may be foreign or domestic, and the issuing bank can only open the counterbacking letter of credit in accordance with the irrevocable letter of credit。The opening of the back letter of credit is usually a middleman to resell other people's goods, profit from it, or when the two countries can not directly handle the import and export trade, through the third party to communicate trade。
The contents of the back letter of credit are generally the same as the original letter of credit except that the witness, beneficiary, amount, unit, time of shipment and validity period are subject to change。Since the new issuer needs to obtain the consent of the original issuer and the issuing bank when amending the terms of a backdated credit, the beneficiary must be careful when using the backdated credit。
十、Common changes in back letter of credit:
1. The beneficiary is the direct supplier
2. The applicant is the beneficiary of the original certificate
3. The unit price of the amount is reduced
4. The validity period of shipment is shortened
5, if the middleman is not willing to reveal the name of the supplier, can stipulate that the bill of lading shipper or other documents other than the invoice to make the name of a neutral person or a third party, so as not to disclose the name of the actual supplier
十一、The difference between an open credit and a back-to-back credit?
A: BacktoBackCredit means that the beneficiary takes the original credit as collateral and asks the bank to issue another letter of credit with similar contents on the basis of the original credit。Back-to-back letters of credit are usually applied for by intermediaries to be issued to actual suppliers。Back-to-back letters of credit are used in a similar way to transferable letters of credit, except that the issuing bank did not authorize the beneficiary to transfer the credit and is therefore not responsible for the new credit。The beneficiary of back-to-back letters of credit can be foreign or domestic。
Transferable letter of credit means that the letter of credit is marked with "Transferable", and the beneficiary has the right to transfer the whole or part of the letter of credit to one or more third parties (i.e. the second beneficiary) for use。The beneficiary of a transferable letter of credit is usually the middleman and the second beneficiary is the actual supplier。The beneficiary may request the authorized bank (transferring bank) in the credit to issue a new credit to the second beneficiary, and the new credit shall be paid by the original issuing bank。The terms of the original letter of credit remain unchanged, but the amount of the letter of credit, the unit price of goods can be reduced, the validity period and the shipment time can be advanced, the proportion of insurance can be increased, and the applicant can become the original beneficiary。A transferable credit can only be transferred once, that is, the second beneficiary cannot be transferred to a new beneficiary。In the course of use, when the second beneficiary submits the document to the transferring bank, the first beneficiary has the right to replace the invoice and draft of the second beneficiary with its own invoice and draft to obtain the difference between the original and the new certificate。
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