《國際結(jié)算（英文）》chapter5 Letter of Credit

InternationalSettlementChapter5LetterofCredit

Chapter5LetterofCredit

5.1DefinitionofLetterofCredit5.2FeaturesofLetterofCredit5.3RoleofBanksunderLetterofCredit5.4PartiestoLetterofCredit5.5ApplicationandIssuingofLetterofCredit5.6ProceduresofDocumentaryLetterofCredit5.7MainContentsofLetterofCredit5.8CheckingandExaminationofLetterofCredit5.9DiscrepantdocumentshandlingunderLetterofCredit5.10TypesofLetterofCredit5.11UniformCustomsandPracticeforDocumentaryCredit5.1DefinitionofLetterofCreditAccordingtoUniformCustomsandPracticeforDocumentaryCredits,ICCPublicationNo.600(UCP600),Creditmeansanyarrangement,howevernamedordescribed,thatisirrevocableandtherebyconstitutesadefiniteundertakingoftheissuingbanktohonoracomplyingpresentation.Generallyspeaking,aletterofcreditisanundertakingattherequestoftheapplicant,writtenbytheissuingbanktothebeneficiary,informingitthatthebankwillpayasumcertaininmoney,ifitprovidescomplyingdocumentswithinaprescribedtimeofperiod.5.2FeaturesofLetterofCreditFirst,theissuingbankundertakestheprimaryliabilitytoeffectpayment.Second,allpattiesconcernedareexclusivelydealingwithdocuments.Third,thecreditisindependentandself-sufficient.Thefeatureoftheletterofcreditcanbesummarizedasbankingcredit,documenttransactionandself-sufficient.5.3RoleofBanksunderLetterofCreditbanksactuponspecificinstructionsgivenbytheapplicantintheapplicationdocumentbankswillactingoodfaithandexercisereasonablecaretoverifythatdocumentssubmittedappeartobeaslistedinthecredit.banksarenotliablenorcantheyheldaccountablefortheactsofthethirdpartiesbanksassumenoliabilityorresponsibilityforlossarisingoutofdelaysorlossintransitofmessages,lettersdocumentsandetc.banksassumenoresponsibilityregardingtoquantityorqualityofgoodsshipped.solongasthedocumentspresentedtobanksappearontheirfacetocomplywiththetermsandconditionsofthecredit,bankstaketheliabilitytoeffectpaymentasstipulatedinthedocumentarycredit.5.4PartiestoLetterofCreditApplicantApplicantmeansthepartyonwhoserequestthecreditisissued.Itisusuallythebuyer/importerinbusiness.IssuingBank

Issuingbankmeansthebankthatissuesacreditattherequestofanapplicantoronitsownbehalf.Itshouldeffectpaymentprovidedcomplyingdocumentsarepresented.Itisprimaryliableforthecreditanditownstherighttorefusedocumentswithdiscrepancies.BeneficiaryBeneficiarymeansthepartyinwhosefavoracreditisissued.Itisusuallytheseller/exporterormiddleman.AdvisingBankAdvisingbankmeansthebankthatadvisesthecreditattherequestoftheissuingbank.Itisalsocallednotifyingbank.Paying/AcceptingBankTheissuingbankmaynominateanotherbank,inmostcasestheadvisingbank,toeffectpaymentortomakeacceptanceunderacredit.Suchabankisreferredtoasthepayingbankoracceptingbankasthecasemaybe.ConfirmingBankConfirmingbankisthebankthataddsitsconfirmationtoacreditupontheissuingbank’sauthorizationorrequest.Sometimes,theadvisingbankorsomeotherbankwilladdconfirmationattherequestofthebeneficiarywithoutauthorizationorinstructionfromtheissuingbank,whichconstitutesa“Silentconfirmation”.ClaimingBankWhenabankeffectspayment,acceptanceornegotiationinaccordancewiththeinstructionsformtheissuingbank,itisentitledtorequesttheissuingbankorthebanknominatedbytheissuingbanktocoverthereimbursementthathasbeenmade.Suchapayingbank,acceptingbankornegotiatingbank,whichclaimsreimbursementfromtheissuingbankorthebanknominatedbytheissuingbankisclaimingbank.ReimbursingBankReimbursingbankmeansabankotherthantheissuingbankthatreimbursetheclaimingbankwiththeinstructionorauthorizationfromtheissuingbank.,Reimbursingbankhasnoresponsiblytocheckthedocumentsundercredit.Theactionofreimbursementisa“simplepayment”fortheissuingbank.thereimbursingbankhastherighttoclaimrefund,whichhasbeenmadebeforetogetherwithinterest,fromtheclaimingbankiftheissuingbankrefusestoeffectpaymentwhendocumentswerereceived.5.5ApplicationandIssuingofLetterofCreditApplicationofLetterofCreditTraditionally,theapplicationforaL/Cshouldincludethefollowingdetails:

Fullnameandaddressofapplicantandbeneficiary;

TypeandamountofL/C;

ExpirydateandplaceofL/C;

TermsofL/C,whethertheL/Cisavailablebysightpayment,deferredpayment,acceptance,ornegotiation;

BywhomandhowtheL/Cisadvised;

Priceterms;Whetherpartialshipmentsandtransshipmentareallowed;Placewheregoodsareloadedonboard/takenincharge/dispatchedfrom,placeofreceipt,portofloading,portofdischarge,placeoffinaldestination;Thelatestdateofshipment;Descriptionofgoods,includingpacking,detailsofquantityandunitprice,ifany;Detailsofthedocumentsrequired;IssuingofLetterofCreditWhentheapplicationhasbeensubmittedtotheissuingbankforL/Cissuing,theissuingbankshouldreviewthetermsandconditionsoftheproposeddocumentarycredittoensurethattheyareincompliancewiththepoliciesofthebankandinaccordancewiththelegalrequirementorregulationoftheissuingbank’scountryMoreover,theissuingbankshouldcarefullynottoincludetheclausewhichrequirethebeneficiarytosubmitadocument,theperformanceandcreationofwhichistotallydependentonthethirdpartynotcontrolledbythebeneficiaryWhenissuingtheL/C,theissuingbankshouldkeepinmindthatthewordingshouldbesimpleandspecific.Therearetwowaystoissuealetterofcreditaccordingtotransmittingmethod:creditissuedbymailandcreditopenedbytele-transmission.AmendmentofLetterofCreditOnlywiththeconsentoftheissuingbank,confirmingbankandthebeneficiary,cantheamendmentorcancellationtakeplace.Thetermsandconditionsoftheoriginalcreditwillremaininforceforthebeneficiaryuntilthebeneficiaryinformtheadvisingbankthatitacceptstheamendment.T

5.6ProceduresofDocumentaryLetterofCredit

ApplicantShippingcompanyBeneficiaryAdvising/Confirming/NominatedBankIssuingBanksignasalescontractappliesforadocumentary

creditrequiringtheadvisingbanktoadviseorconfirmthecredit.advisescredittothebeneficiary

shipsthegoodsandpreparesrelativedocuments

presentsrequireddocumentstothenominatedbankmakessightpayment/deferredpayment/acceptance/negotiationtothebeneficiarysendsthedocumentsforreimbursementpaysnominatedbankadvisestheapplicanttoredeemdocumentsprovidedcomplyingdocumentsarepresented.reimbursestheissuingbankpresentstheredeemeddocumentsdeliversgoods(1)Applicant/BuyerandBeneficiary/sellersignasalescontract,specifyingthatdocumentarycreditwillbeissuedaspaymentmethodtotheissuingbank;(2)Applicantappliesforadocumentarycredittotheissuingbank;(3)Issuingbankissuesacreditbytele-transmission/mail,requiringtheadvisingbanktoadviseorconfirmthecredit.(4)Advisingbankadvisescredittothebeneficiaryuponverificationofitsauthenticity;(5)Afterverifyingofthecredit,beneficiaryshipsthegoodsandpreparesrelativedocuments;(6)Beneficiarypresentsrequireddocumentstothenominatedbank;(7)Aftercarefulexaminingofdocumentswithin5bankingdays,thenominatedbankmakessightpayment/deferredpayment/acceptance/

negotiationtothebeneficiary.(8)Nominatedbanksendsthedocumentstoissuingbankforreimbursement.(9)Aftercarefulexaminingofdocumentswithin5businessdays,theissuingbankpaysnominatedbank;(10)Issuingbankadvisestheapplicanttoredeemdocumentsprovidedcomplyingdocumentsarepresented.(11)Applicantreimbursestheissuingbank;(12)Applicantpresentstheredeemeddocumentstotheshippingcompany;(13)Shippingcompanydeliversgoodstoapplicant.5.7MainContentsofLetterofCreditItemsonthecredititself(1)KindsofCredit(2)L/Camountandcurrency(3)L/Cnumber:(4)Dateandplaceofissue(5)Expirydateandplaceofthecredit(6)IssuingBank'sfullnameandaddress(7)Applicant'sfullnameandaddress(8)Beneficiary'sfullnameandaddress(9)AdvisingBank'sfullnameandaddressItemsondraftItisthedrawnclauseofthedraft.Whichisusedtoillustratethereasonofthedraftissuance.Theclausemaybewrittenas”draftdrawnunderL/CNo:xxxxissuedbyAAAbankdatedyy,mm.dd.Itemsonthetransportation,goodsandshippingdocumentsItemsontransportationstipulationshouldstatesportofloading,portofdischargeandplaceofdestination,thelatestdateofshipmentdate,andalsowhetherpartialshipmentandtransshipmentareallowed.Itemongoodsincludewhatdescriptionofgoodsis.Thenameofcommodity,quantity,packing,unitprice,priceterm,shippingmarkandetc.,ItemsonShippingDocumentstheindicateinfulldetailoftheshippingdocumentstobepresented,whichwillmainlyincludecommercialinvoice,packinglist,billoflading,insurancepolicy,certificateoforigin,inspectioncertificate,customsinvoiceandetc.

Otheritems

(1)Theinstructionstonegotiating/accepting/payingbank

(2)Theissuingbank'sundertakingclause

(3)Theissuingbank'snameandsignature

(4)ThisdocumentarycreditissubjectedtoUCP6005.8CheckingandExaminationofLetterofCredit

Thefollowingisachecklistfortheseller’sexaminationofcreditthebuyerandsellersnameandaddressarecorrect;theamountofthecreditisinaccordancewithcontract,includingunitprice,shippingcharges,handlingcost,andtotalinvoiceamount.thedescriptionofgoodsisconsistentwithsalescontact.thecreditavailability（sightpayment,deferredpayment,acceptanceornegotiation）agreewiththecontractconditions.thelatestdateofshipment,L/Cexpirydate,documentspresentationperiodallowsufficienttimeforprocessingtheorder,shippingthemerchandiseandpreparingthedocumentsforpresentationtothebank.theexpiryplaceisasperthesalescontract.partialshipmentortransshipmentregulationareasperthesalescontract.thepointofdispatch,takinginchargeofthegoods,portofloading,portofdischargeandfinaldestinationareasagreedinthesalescontact.insurancecoverageandpartytopaychargesareasagreed.instructiononwhomthedraftaretobedrawn,andinwhattenor(maturityanddate)arecorrect.thecreditisconfirmedorunconfirmedasperthesalescontacttherearenounacceptableconditions.theissuingbank(orconfirmingbank)iswithcreditreputation,atleastknowntotheseller.5.9DiscrepantdocumentshandlingunderLetterofCreditBankshaveuptofivebankingdaysfollowingthereceiptofdocumentstoexamineandnotifythepartyfromwhichhereceiveddocumentsoftheiracceptanceornon-acceptance.Ifabankinvolvedfinddiscrepanciesinthedocuments,bankwillactasfollows:1.returnthedocumentstothebeneficiarysothatthebeneficiarycancorrectthemandrepresentthemduringtheperiodofvalidity;2.remitthediscrepantdocumentswithapprovalandconsentofthebeneficiarytorespectiveissuingbankorconfirmingbankforsettlement;3.returnthediscrepantdocumentstothebeneficiarywithinstructionsthatheremitthedocumentsdirectlytotheissuingbankorconfirmingbank,fortheirapprovalandsettlementunderthecredit;4.requestbytele-transmission,withthebeneficiary’sconsent,theissuingbankortheconfirmingbank’sauthorizationtoproceedwithpayment,negotiationoracceptanceagainstthediscrepantdocumentspresented;5.requireabeneficiary’sguaranteeorindemnityorbankingundertakingtothepayingbank,acceptingbankornegotiatingbanktohonorthediscrepantdocuments.Thebeneficiarywillcompensatethenominatedbankiftheissuingbankorconfirmingbankrefusetoreimburseforsettlement.5.10TypesofLetterofCredit

CleanCreditandDocumentaryCredit

IrrevocableCreditandRevocableCredit

SightCreditandUsanceCredit

ConfirmedCreditandUnconfirmedCredit

SightPaymentCredit/DeferredPaymentCredit/AcceptanceCredit/NegotiationCreditRevolvingCreditCreditRevolvingonTimeBasis

CreditRevolvingonValueBasisTransferableCredit

Itisadocumentarycreditunderwhichthefirstbeneficiaryhastherighttogiveinstructionstothepayingoracceptingbankortothebankentitledtoeffectnegotiationtomakethecreditavailabletooneormoreothersecondbeneficiary.BacktoBackCreditAback-to-backcreditisanewdocumentarycreditopenedonthebasisofanalreadyexisting,nontransferableirrevocabledocumentarycreditinfavorofanotherbeneficiary.RedClauseCreditAredclausecredithasaspecialclause(redclause)thatauthorizestheadvisingbankoranyothernominatedbanktomakeadvancepaymentpartlyorfullytothebeneficiarypriortothepresentationoftheshippingdocuments.Itisoftenusedtoassistmanufacturersinpayingforlaborandrawmaterialsusedinmanufacturingortomiddlemenwhoneedfinancingtoconcludeatransaction.ReciprocalCreditReciprocalletterofcreditaretwoseparateequivalentamountcreditinbarterorcompensationtrade,wheretheapplicantofthefirstcreditwillbethebeneficiaryofthesecondcredit,andviceversa.StraightcreditStraightcreditissuchkindofcredit,theobligationoftheissuing