Chapter 6 Letter of credit 信用证.pptVIP

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ★ Why a back-to-back credit ? The possible reasons are that some official documents would reveal seller’s name and address under transferable LC, e.g. Certificate of Origin, etc. If so, the best option is back-to-back Credit, and trader could avoid revealing his middleman’s position as transferable LC would do. ★ Invoice,draft and official documents must be substituted. ★ Neutral names(forwarder and custom agent) can be used on B/L, etc. just as transferable LC，but not on official documents. Type of LC: Back-to-Back Credit (7) Type of LC: Reciprocal Credit Malaysia Importer/Exporter Contract of processing on order Terms of payment: DC 1 Singapore Exporter/Importer 2apply Applicant of 1st LC Issuing Bank DC(1)This Credit should not be available unless until the reciprocal credit is established by Trust Union Bank, Singapore in favor of Tamali Trading Co. Ltd. Ampang for amount of USD100,000 covering shipment from M to S (P.143) 3 Advising Bank 4 Adv. Beneficiary of 1st LC The 1st LC is a terms Credit, in which, Malaysian buys spare parts from Singaporean to assemble into machine. The 2nd LC is a sight Credit, in which Singaporean buys assembled machine from Malaysian makes sight payment. The two LCs would offset amounts at one Issuing Bank and the balance would be paid in cash. Issuing Bank Advising Bank 5apply DC(2):This is a reciprocal Credit against Commercial Development Bank Credit No.MS1024 favoring Universal Metals Trading(Pte)Co., Ltd. Jaran Jurang Singapore 584A, covering shipment of spare parts of ……(P.143) 6 7Adv. Applicant of 2nd LC Beneficiary Of 2 LC Type of LC: Red Clause / Anticipatory Credit (1) Importer Exporter 1I am short of working capital! 2I will offer you some. Please open a letter of credit offering advance payment before shipment! 3 Issuing bank LC with advance terms and guarantee to compensa