Unit 7 Payment and Settlement of accounts 1. Terms of payment (1) Remittance T/T(Telegraphic Transfer) ---M/T(Mail Transfer) D/D Demand Draft)
Unit 7 Payment and Settlement of accounts 1. Terms of payment (1) Remittance ◼ ---T/T (Telegraphic Transfer) ◼ ---M/T (Mail Transfer) ◼ ---D/D (Demand Draft)
(2) Collection D/P Document against Payment) D/A Document against Acceptance) (3) Letter of Credit What is L/c? Types of L/C Documentary L/C, Irrevocable L/C, Confirmed Sight/USance; Transferable Revolving Reciprocal; Back to Back; anticipatory; Standby
(2) Collection ◼ ----D/P (Document against Payment) ◼ ----D/A (Document against Acceptance) (3) Letter of Credit ----What is L/C? ----Types of L/C Documentary L/C; Irrevocable L/C; Confirmed; Sight/Usance; Transferable; Revolving; Reciprocal; Back to Back; anticipatory; Standby;
Parties in the l/c applicant contract beneficiary 5.shipment 46 Issuing bank advising bank /negotiating Paying bank 7
----Parties in the L/C 1.contract 5.shipment 2 8 4 6 3 7 applicant Issuing bank advising bank /negotiating beneficiary Paying bank
2. Procedure of the L/c ■ Application Form; a Advising the beneficiary Examination of the L/c ■( Amendment of l/C) a Complementing the contract Presenting the documents under the L/C a Negotiating or Paying for the L/C
2.Procedure of the L/C ◼ Application Form; ◼ Advising the beneficiary; ◼ Examination of the L/C; ◼ (Amendment of L/C) ◼ Complementing the contract; ◼ Presenting the documents under the L/C; ◼ Negotiating or Paying for the L/C;
3. Objectives in L/C business (eXporter urges importer to open a L/C (2)Importer notices seller for the L/C ()Amendment ofL/C (4 Dispute arise in dealing with the L/C
3. Objectives in L/C business (1)Exporter urges importer to open a L/C; (2)Importer notices seller for the L/C; (3)Amendment of L/C; (4)Dispute arise in dealing with the L/C;
4. specimen letters-1 (1) Exporter urges importer to establish a letter of credit a We regret to inform you that there has been no news from you at all about your letter of credit which should have reached us before Sept. 9th 2002. This has caused us much inconvenience since we have already made preparations for shipment according to our sales confirmation No 4
4.specimen letters-1 (1) Exporter urges importer to establish a letter of credit ◼ We regret to inform you that there has been no news from you at all about your letter of credit, which should have reached us before Sept. 9 th , 2002. This has caused us much inconvenience, since we have already made preparations for shipment according to our Sales Confirmation No.4
a You may recall that the same thing happened to the execution of our last contract. It was only after the market had turned for the better that you opened the covering L/C quite beyond the time limit. We should have refused then to effect shipment but we acceded to your request for fulfillment of your order. At the same time we pointed out that you should take effective measures to prevent a similar occurrence
◼ You may recall that the same thing happened to the execution of our last contract. It was only after the market had turned for the better that you opened the covering L/C, quite beyond the time limit. We should have refused then to effect shipment, but we acceded to your request for fulfillment of your order. At the same time we pointed out that you should take effective measures to prevent a similar occurrence
a This article, as you know, has met with great popularity since offered for sale, and new orders have nearly exhausted our stock. But considering our long-term business relationship we are still holding the goods for you a We hope that you will lay great store on your credit standing this time and establish the relevant l/c before oct gth 2002
◼ This article, as you know, has met with great popularity since offered for sale, and new orders have nearly exhausted our stock. But considering our long-term business relationship we are still holding the goods for you. ◼ We hope that you will lay great store on your credit standing this time and establish the relevant L/C before Oct. 9 th , 2002
a Please not that unless the l/c reaches us before the suggested time, we shall have no alternative but to cancel the contract and will not enter into any more transactions with you next year. We regret this decision, but of course we are in on way to blame We are looking forward to your letter of credit
◼ Please not that unless the L/C reaches us before the suggested time, we shall have no alternative but to cancel the contract and will not enter into any more transactions with you next year. We regret this decision, but of course we are in on way to blame. ◼ We are looking forward to your letter of credit
Specimen letter-2: (2)Amending the L/C Dear sirs a We have received your L/C No xx, but regret to find that there are certain points that do not agree with the terms of our sales Confirmation No xX 1. Our S/C No xx emphasized that your letter of credit shall allow transshipment. but the Credit states transshipment prohibited 2. Your Credit calls for shipment in two equal monthly lots during June/July, 2002, whereas it is explicitly stipulated in the S/C that shipment is to be made in a single lot not later than July 31, 2002
Specimen letter-2:(2)Amending the L/C Dear sirs, ◼ We have received your L/C No.xx, but regret to find that there are certain points that do not agree with the terms of our Sales Confirmation No. xx. ◼ 1.Our S/C No. xx emphasized that your letter of credit shall allow transshipment, but the Credit states: “transshipment prohibited” ; ◼ 2. Your Credit calls for shipment in two equal monthly lots during June/July, 2002, whereas it is explicitly stipulated in the S/C that shipment is to be made in a single lot not later than July 31,2002
