Module5.Lc and amendment.pptVIP

5. L/C Checking Amendment 1. Introduction Letter of credit is the most frequently used mode of payment in international trade. Upon receiving the L/C, the beneficiary will check the terms and conditions against the S/C to ensure that they are in full conformity with the terms stipulated in the S/C. If there are any discrepancies, even a minor difference, which is not discovered or amended timely and duly, may lead to the exporter’s serious difficulty because of the payment dishonored(拒付）by the issuing bank. As a result, when there are some discrepancies or soft clauses which the beneficiary can’t accept set forth in the L/C, amendment is necessary. 2. points of attention 1) The form of documentary credit (irrevocable or revocable). 2) The date and place of expiry (China or abroad), the latest date of shipment and the period for presentation(7-21 days after shipment within the validity of the L/C). 3) The currency code and amount both in numeral and in capital letters.( match each other) 4) The name and address of the exporter and importer. 5) The specification and quantity of the goods and shipping marks. 6）The terms of price including trade terms, freight and insurance(10% or more) and so on. 7) Documents required (draft, commercial invoice, bill of lading, insurance policy, certificates. etc.) 8) Partial shipment and transshipment. 9)Name of the place or port of shipment and discharge (from port to port). 10)Instructions to the negotiating bank , the confirming bank(保兑） , if any. 11) Soft clauses. 3. Example of L/C Amendment Dear Mr. John, We have received your L/C N0.0612 covering 2,500 dozen Men’s shirts. After checking the L/C, we regret to find that there are certain points that do not comply with the terms of our S/C No. 08GS102. 1. Our S/C No. 08GS102 emphasizes that your L/C shall allow transshipment, but the credit states:” transshipment prohibited”. 2. Your L/C calls for shipment in two equal monthly lots During May/June,