国际商务函电：Chapter 8.pptVIP

1. Overview Letter of credit (L/C) is one of the safest payment methods commonly adopted in international trade. It is a payment undertaking given by a bank to a beneficiary and is issued on behalf of the applicant. It allows buyers to offer secure terms of payment to sellers in which a bank (or more than one bank) gets involved. This method provides a solution to solve the dilemma between the seller and the buyer, and ensures a smooth business transaction across different countries. 2. The Features of the L/C： (1) L/C is based on bank credit, which provides a high level of protection and security to both buyers and sellers engaging in international trade. (2) The seller can be assured that payment will be made by a party independent of the buyer as far as the terms and conditions of the credit are well satisfied. (3) The buyer gets the guarantee that his money will be released to the seller only if the bank receives the title documents required by the credit. 4. Opening An L/C A confirmed L/C on hand is a prerequisite for the seller to proceed with further business arrangements and effect shipment. BUT……the opening of an L/C is usually delayed owing to various reasons and causes inconvenience or even risks for the seller. 5. Amending An L/C The seller, upon receipt of an L/C, should make a thorough examination on each clause in the L/C against the terms and conditions stipulated in the sales contract. If the seller finds any discrepancy or unacceptable content, a request for L/C amendment should be sent to ask the buyer to make an amendment. 6. Extending An L/C An L/C extension is also a part of amendment. Since all the business transactions should be completed within the L/C expiry date, any extension in the shipping date and documents submission date will usually result in an extension in the expiry date accordingly. The L/C extension refers to an amendment request to postpone those three dates. Specimen Letters Urging establishment of L/C Lette