國際結(jié)算英文課件：Chapter 4 Documentary Credits

1、In this chapter, you will learn:Characteristics of a letter of credit;Basic documentary credit procedure;Different types of credits;The content of letter of credit;Risk protection and financing under credit methods.Chapter 4 Documentary CreditsI. The definition of Letter of Credit（L/C） Credit means

2、any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation.(UCP600)A letter of credit is the written promise of a bank, undertaken on behalf of a buyer, to pay a seller the amount specified in

3、 the credit provided the seller complies with the terms and conditions set forth in the credit. Section 1 Outline of Letter of Credit The sales contract between beneficiary and applicant.The application between issuing bank and applicant.The documentary credit between beneficiary and issuing bank.II

4、.The contractual arrangement under a D.C operation1. ApplicantApplicant means the party on whose request the credit is issued.The buyer(P52).rights and obligationsApplication of issuing L/C;Payment to issuing bank;Obtaining complying documents.III. Parties to Letter of Credit and their rights and ob

5、ligations Issuing bank means the bank that issues a credit at the request of an applicant or on its own behalf.rights and obligationsIssue the Letter of Credit according to application signed by applicant.Issuing banks are the primarily liability for payment.Once payment is made by the Issuing Bank,

6、 that is ultimate payment.Issuing banks examine all documents, and pay it against documents.2. Issuing BankAdvising bank means the bank that advises the credit at the request of the issuing bank.rights and obligationsCheck the apparent authenticity of the credit.Find the credit instructions incomple

7、te or unclear. If the advising bank found the credit incomplete or unclear, it would inform the issuing bank of the action and request it to provide the necessary information without delay.3. Advising BankBeneficiary means the party in whose favor a credit is issued.Honour（承付） means:a. to pay at sig

8、ht if the credit is available by sight payment.b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment.c. to accept a bill of exchange (“draft”) drawn by the beneficiary and pay at maturity if the credit is available by acceptance.4. Beneficiaryr

9、ights and obligations1.in contract: The goods must conform with the contract; The documents must conform with the goods 2.in D.C The documents are in conformity; The documents are in line with the D.C3.The beneficiary can claim from the applicant for the payment in case of issuing bank not being abl

10、e to pay.4. Beneficiary(continued)Negotiation means the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbur

11、sement is due to the nominated bank.議付是指，指定銀行在相符交單下，在其應(yīng)獲償付的銀行工作日當(dāng)天或之前向受益人預(yù)付或同意預(yù)付款項(xiàng)，從而購買匯票（其付款人為指定銀行以外的其他銀行）和/或單據(jù)的行為。自由議付和限制議付：5. Negotiating BankConfirming bank means the bank that adds its confirmation to a credit upon the issuing banks authorization or request.As requested by the issuing bank, we

12、hereby add our confirmation to this credit in accordance with the stipulations under UCP600 Article 8.7. Nominated bank Nominated bank means the bank with which the credit is available or any bank in the case of a credit available with any bank.6. Confirming bank 8. Reimbursing Bank Negotiating Bank

13、Issuing BankReimbursing BankDocumentary Bill Reimbursement Claims Authorization Reimbursement11I. The Procedure of Documentary Credit. Section 2 The Procedure of Documentary CreditBeneficiaryApplicantNegotiating BankIssuing BankAdvising BankApplicationDocumentary CreditCredit adviceShipmentDocumenta

14、ry BillChecking and NegotiatingSending Documents &Claiming to moneyRedeem Documents AdviceExamining and paying13A letter of credit is a bankers credit rather than a traders credit.A letter of credit is a separate transaction from the sales contract.Under letter of credit, banks involved deal only wi

15、th documents rather than goods.II. The main characteristics of L/C1.AdvantagesOnce conforming documents are presented to the negotiating bank, beneficiary will be sure to secure negotiation, and therefore speeds up his funds turn over. The burden of bankroll is more balanceable than collection.III.

16、Advantages and Disadvantages of L/C There are some fraudulent cases occurred under D.C .The costs of transaction are higher.2. Disadvantages of L/C See the attachmentSection 3 Forms and Contents of Letter of CreditI. According to the revocability of credit1. Revocable Credit It gives the buyer and /

17、or issuing bank ability to amend or cancel the credit at any time right up to the moment of intended payment without approval by, or notice to, the seller.2. Irrevocable CreditIt can neither be amended or canceled without the agreement of the issuing bank, the confirming bank, if any, and the benefi

18、ciary.Section 4 Classification of Letter of CreditII. According to the adding of confirmation1. Confirmed Credit2. Unconfirmed CreditEg. This notification and enclosed advice are sent to you without any engagement on our part. III. According to the availability of payment1. Sight payment Credit Payi

19、ng bank is the issuing bank itself.Undertaking Clause in D.C:We hereby engage that payment will be duly made against (sight draft and documents)/(documents) presented in conformity with the terms of this Credit.1. Sight payment Credit (continued)Paying bank is the nominated bank.Undertaking Clause i

20、n D.C: Credit available by payment with the nominated bank. For your payment you are authorized to charge our account with xxx Bank. 口 By payment at sight against the documents detailed herein口 and Beneficiarys draft(s) drawn on Bank of China, Tianjin.2. Deferred payment CreditL/C indicating a bank

21、to pay on a specified future date, is a deferred credit. Undertaking Clause in D.C: We hereby engage that payment will be duly made at maturity i.e. XX days after presentation of documents XX days after the date of shipment A fixed future date against the documents presented in conformity with the t

22、erms of this Credit 口 By deferred payment at 30 days after the date of shipment against the documents detailed herein3. Acceptance Credit L/C indicating a bank to accept and pay the face value of time draft drawn on this bank at maturity, is an acceptance credit.Undertaking Clause in D.C: 口 By accep

23、tance of drafts at 30 days after sight against the documents detailed herein口 and Beneficiary s draft(s) drawn on Bank of China, TianjinWe hereby engage that drafts drawn in conformity with the terms of this Credit will be duly accepted on presentation to drawee bank and honoured on maturity.It is s

24、tipulated in D.C:Draft at 150 days sight on Issuing Bank ,discount at current rate and charges are for buyers account. Reimbursing: We authorize the Nominated Bank to debit our Sydney Office account with their Beijing Head Office at sight with the amount of drawing in terms of the L/C.Usance Credit

25、payable at sight4. Negotiation Credit Restricted negotiation Undertaking Clause in D.C: Credit available by negotiation with the nominated bankNegotiations under the Credit are restricted to -Bank,(place) We hereby authorize -Bank to negotiate the draftFreely Negotiable CreditIV. According to the tr

26、ansferability of the Credit1. Transferable CreditA new Transferable Credit may be opened at the request of the first beneficiary by the transferring bank in accordance with all terms and conditions of original Credit except that, The applicant may be changed by first beneficiary. The credit amount a

27、nd unit price may be reduced. The shipment and expiry dates and latest date for presentation of documents may be shortened. The percentage of insurance cover may be increased.2. Non-transferable CreditV. Back-to-back L/C1. Undertaking Clause in back-to back L/CPayment under this Credit is to be made upon receipt of the cover or the notice of acceptance from the Issuing Bank of the master Credit.This Credit shall become operative only upon our