chaptr_8商贸英语(王玉环 赖艳 主编)课件习题答案.ppt

Teaching Objectives Upon completion of this chapter, you will Have a general idea of issuance and amendment of L/C Recognize how to check L/C Understand the major items and types of L/C Grasp the basic writing techniques to advise, extend, amend and urge L/C Text Analysis Introduction to the Chapter 8.1 Nature of Letter of Credit 8.2 Procedures of Letter of Credit Operation 8.2.1 Issuance of Letter of Credit Basic Items of Letter of Credit Major Types of Letter of Credit 8.2.2 Amendment of Letter of Credit 8.2.3 Utilization of Letter of Credit 8.3 Consideration in using L/C  8.3.1 Points for Attention in Using L/C 8.3.2 L/C Risks and L/C Risk Prevention Introduction to the Chapter 8.1 Nature of Letters of Credit In simple words, as a legal financial instrument, a documentary letter of credit is a conditional bank undertaking or guarantee of payment which is used to secure payment for goods and services and mitigate the risks of doing business. 8.1 Nature of Letters of Credit Characteristics of using an L/C ● Letter of credit is a conditional undertaking issued by a bank at the request of the buyer, by which the seller obtains higher security in payment. ● Payment is against the presentation of the stipulated documents in compliance with the terms and conditions of the credit. ● A letter of credit is a self-sufficient instrument. Although the credit is issued on the basis of the Sales Contract, banks are in no way concerned with or bound by such contract. Procedures of Letter of Credit Operations The documentary credit procedure involves three basic groupings of steps: Issuance—Amendment—Utilization 8.2.1 Issuance of Letter of Credit 1) the buyer’s application for opening a documentary credit at the issuing bank 2) the issuing bank’s formal notification to the seller through the advising bank. . Basic items of letters of credit Major