第6章 开立审核修改信用证.docVIP

第6章 开立、审核及修改信用证 教学重点： 审核信用证 修改信用证 Focus: Examination of L/C Amendments to L/C 教学难点： 审核信用证 Difficulties: Examination of L/C 教学内容： 开立信用证 审核信用证 修改信用证 Contents: Issuance of L/C Examination of L/C Amendments to L/C Letter of Credit (L/C) is a principal payment method. It is much more complicated than Remittance and Collection. L/C is commonly used in large scale import and export business or the initial transaction between sellers and buyers to ensure performance of the contract and recovery of payments. Irrevocable documentary L/C is the most commonly used. Therefore, foreign trade salesman should particularly be familiar with and master its operation procedures. A documentary letter of credit (L/C) is a commitment from the issuing bank to pay the seller as beneficiary, a specified amount provided certain terms and conditions of the letter of credit are met. All L/C’s are irrevocable, which means that once the L/C is established it cannot be revoked or changed without the consent of all parties. In international business, When the ability of importer to pay is uncertain, In countries where there is a regulatory requirement, When a seller needs an L/C to obtain bank financing, They will choose L/C as the payment method. L/C is beneficial to both the exporter and the importer. Advantages to Importer: Provides reasonable assurance that proper shipment is made prior to payment. May obtain lower price due to reduced credit risk for seller. Advantages to Exporter: Substitute bank’s credit for buyers. Provides assured and prompt payment. Protects against cancellation of underlying sales contract. The L/C also distributes risk between the importer and the exporter. The exporter is assured of payment when the conditions of the L/C are met and the importer is assured that the conditions specified are documented and shipment of the goods has been made. However, the L/C also has drawbacks. If discrepancies exist in the documents required by the L/C that cannot be corrected by