国际商贸英语Unit 6 Letter of Credit

International Business English
Language skilEnglish
Reading
In this section, you are supposed to understand the items on SWIFT L/C and mail L/C. Based on the knowledge and understanding of the L/Cs, you are supposed to check the L/Cs against the sales contract for any discrepancies that may exist.
International Business English
3 The circulation of letter of credit
1) After the seller and the buyer agreed on the settlement of a deal by letter of credit, the buyer sends an application for its bank to issue a letter of credit in favor of the seller that specifies the documents needed for payment. The buyer is the applicant of the L/C and the seller is the beneficiary of the L/C. 2) The buyer’s bank evaluates the buyer’s credit standing and then decides whether to issue the L/C at the buyer’s request. As a general practice, the buyer pays a deposit for the establishment of the L/C. The bank which opens the L/C is called issuing bank.
International Business English
letter of credit 信用证 信用证是一种开证银行根据申请人（进口方）的要求和申请 ，向受益人（出口方）开立的有一定金额、在一定期限内凭 汇票和出口单据，在指定地点付款的书面保证。信用证是开 证行向受益人做出的付款承诺，使受益人有了收款的保障， 因此是对受益人有利的支付方式。但是受益人只有在按信用 证规定提供了信用证要求的单据时才能得到款项.因此信用证 是银行的有条件的付款承诺。
the specified conditions in the L/C, the bank must pay the seller on behalf of the buyer. Therefore, in essence, L/C is a kind of bank credit, which provides more security to both the seller and buyer than remittance and collection that are based on commercial credit.
International Business English
Professional Knowledge
International Business English
1 Definition of letter of credit
Letter of credit (L/C) is a written promise of a bank, at the request of the buyer, to pay the seller if he meets the conditions stipulated in the L/C. There are a few kinds of L/Cs in international payment, of which irrevocable documentary letter of credit is the most often used. It is a written promise of a bank, on behalf of the buyer, to pay the seller the amount specified in the credit provided the seller presents the documents in compliance with the terms of the credit.
International Business English
In addition, in case of the failure of the buyer to effect payment,
as long as the seller presents the documents in compliance with
reimbursement:偿付 debit:计入借方
International Business English
4 The importance of the documents in the payment by L/C
In L/C payment, banks deal with documents and not goods. They are only concerned that documents presented appear on their face to comply with the terms and conditions of the credit. Any dispute as to quality or quantity of goods delivered must be settled between the importer and exporter.
in favor of 以...为受益人 issuing bank: 开证行
International Business English
3) The issuing bank nominates another bank in the country of the seller, usually its overseas branch or corresponding bank, to advise the credit to the beneficiary. The bank which advises the L/C is called advising bank. 4) The seller checks whether the L/C matches the sales contract and whether all its terms and conditions can be satisfied (e.g. all the documents can be obtained in good time). If there is anything that may cause a problem, an amendment must be requested.
International Business English
2 The role of banks in settlement by letter of credit
Banks act as go-betweens to collect payment from the buyer in exchange for the transfer of documents specified in the L/C from the seller to the buyer, for instance, bills of lading, insurance policies, invoices, packing lists, weight memos, etc. These documents are necessary for the buyer to take possession of the goods.
International Business English
国际商贸英语
Unit 6
Letter of Credit
International Business English
Contents
1 2 3
Professional Knowledge Language skills Resource bank
corresponding bank:关系行，指和开证行有业务往来的银行 advising bank: 通知行 amendment: 信用证的修改
International Business English
5) The seller ships the goods and presents his documents to the advising bank for settlement. The advising bank checks the documents against the L/C. If the documents are in accordance with what the credit stipulates, the advising bank pays the money in place of the issuing bank. Then it transfers the documents to the issuing bank for reimbursement. 6) The issuing bank debits the applicant with the value of the goods, plus any applicable commission and expenses, and hands over the documents to the buyer. The buyer can then clear the goods through customs and take the possession.
International Business English
irrevocable documentary letter of credit 用证
不可撤销跟单信
它是指开证行一经开出、在有效期内未经受益人同意，不得 随意修改或撤销的信用证；只要受益人按该证规定提供有关
单据，开证行（或其指定的银行）保证付清货款。
International Business English
appear on their face to comply with the terms and conditions of the credit 表面和信用证的条款相符
表面相符原则是信用证下银行审单时所遵循的首要原则，即开证行仅仅 对受益人提交的单据表面上进行审查以便确定该单据是否和信用证要求 相符，从而做出付款或拒付的决定。银行对单据的形式、充分性、准确 性、真实性、虚假性、法律效力概不负责。由此可以看出信用证交易中 ，银行处理的是单据而非实际的货物，只要出口商提交了符合信用证要 求的单据银行就要付款，因为银行只能合理谨慎地审核单据，但是要求 它对于各种单据的真伪进行专业性鉴定显然有失公允。所以在信用证交 易中，进口商同样要仔细调查出口商的信誉，以防出口商提交伪造单据 以次充好骗取货款。