Unit 10Examination of LC.pptVIP

Unit 10Examination of LC Text A Examination of a Letter of Credit When an exporter receives a letter of credit either by fax or by mail from the importer or from the importer’s bankers or through an advising bank, it is always important to examine the details mentioned in the letter of credit. If there is any discrepancy, the exporter should immediately contact the importer and request the latter to arrange with the issuing bank of the letter of credit to send an amendment in time. The following points may be given for reference in the examination of the letter of credit: 1.? Whether the bank issuing the L/C is a sound reliable foreign bank, whether the currency employed and other reimbursement clauses are clear and in accordance with the regulations in the exporting country. 2.The L/C should usually be irrevocable without any restrictions, such as “ Subject to import licence obtainable”, etc. 3.Whether the description, specifications, quantity, number, packing, unit price, shipping time, port of destination, insurance cover, etc. of the goods are in accordance with the sales contract. 4.?The total amount, validity time and date and place of expiry. 5. Whether any special clauses or stipulations are mentioned in the L/C regarding shipping documents. Text B Asking for Amendments to Letters of Credit (A) Dear Sirs, We are in receipt of your letter of September 1, informing us of the establishment of your L/C No. A - 880 against our S/C No. 122. The L/C in question has just come to hand. However, we regret to have found that there are certain clauses which do not conform to those of the contract. Hereby we list discrepancies for your attention: 1.??The name of the beneficiary should read “Shanghai Machinery Equipment Imp. Exp. Corp.”, instead of “Shanghai Machinery Imp. Exp. Corp.”, the latter being the name of another import and export corporation in Shanghai. 2.??Please insert the word “about” before the quantity and amount in your L/C as it