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1、外贸英语实务 （第二版）,Unit 9 L/C Examination and Amendment,Part I Case Lead-in,Part II Reading,Part III Sample Conversations,Contents,The contract stipulated that the buyer should open the L/C before Jan. 30, 2012, and shipment should be made before Feb. 15, 2012. The relative L/C was opened on Jan. 28 and r
2、emained valid to Feb. 28. But the seller was unable to make shipment according to the contract stipulation, and he cabled the buyer to ask for extending the time of shipment and the validity of the L/C to Feb. 20 and Mar. 5 respectively. The buyer agreed but he didn t notify the opening bank. The se
3、ller shipped the goods on Feb. 17, but he was dishonored by the bank when he made negotiation. Does the bank have the right to dishonor the goods? How should the seller deal with the matter? The L/C is a term of payment and commonly adopted in our foreign trade today. It is issued by a bank at the r
4、equest of an importer. The L/C should reach the exporter in time. But in practice, delayed opening of the L/C and discrepancies between L/C and S/C often occur, so the exporter should urge the importer to apply for the opening of L/C when necessary, and check up the L/C with the contract carefully a
5、fter he receives the relative L/C in order to collect the payment safely and perform the contract smoothly. If the exporter finds any unacceptable discrepancies, he should advise the importer to make amendment accordingly.,L/C Examination and Amendment The Functions of L/C,Because distrust exists be
6、tween the exporters and the importers as to whether the other party will carry out his obligations, it is better to have a third party that makes sure payment to the exporter and goods to the importer. Banks have been chosen as that party since they are much better trusted in the business world. L/C
7、 is the payment guarantee issued by the banks according to the importer s request to the exporters, the beneficiaries on certain conditions. It is a kind of banker s credit. Under L/C, the exporter looks to the bank for payment instead of relying on ability or willingness of the importer to pay, but
8、 he cannot get payment unless he obeys all the terms in the L/C. At the same time, the bank pays on behalf of the importer against documents which represent the goods and give the importer rights to the goods.,The Procedures of L/C and Parties Involved,1. The exporter and the importer stipulate in t
9、he sales contract that the payment will be made by L/C. Under this circumstance, the importer acts as the applicant who applies for the opening of L/C, while the exporter the beneficiary in whose favor the L/C is issued and who is entitled to receive the payment. 2. The applicant applies for the ope
10、ning of L/C to his bank, that is, opening bank and goes through the relative proper mortgage formalities. In this step, the importer should fill in the application with commodity name, quality, quantity, unit price, total value, trade term, date of payment, packing, shipping period, validity and so
11、on; and generally, he should prepay certain percentage of the total amount and some proper bank charges. 3. The opening bank, upon the request of the applicant, issues the irrevocable L/C, and then sends it to the advising bank, usually his branch or correspondent bank in the exporters country.,4. T
12、he advising bank checks and establishes the apparent authenticity of the L/C, and then informs the exporter and passes the L/C to him. If the exporter requires a confirmed L/C, the advising bank may be asked to confirm the L/C and a fee will be charged to the importer for this service. 5. The export
13、er checks up the L/C terms according to the contract and relevant regulations. If he finds out any discrepancies which he cannot accept between the L/C and the contract, he immediately advises the importer to ask the opening bank for revision. After the exporter is satisfied with the clauses in L/C,
14、 he makes the goods ready and ships the goods. 6. After shipment of the goods and preparation of relevant documents including the draft, the exporter presents the draft, together with the L/C and other required documents to his bank, that is, negotiating bank for negotiation within the validity of t
15、he L/C. The advising bank is usually, but not necessarily the negotiating bank.,7. If the documents are full and correct, the negotiating bank pays or accepts the draft. If there are any discrepancies in the documents to which the exporter is unable or unwilling to correct, the negotiating bank cons
16、ults with the paying bank in written form and waits for its decisions on how to deal with the documents. If the paying bank rejects the documents, the negotiating bank returns them to the exporter directly; if the paying bank accepts the discrepancies, the negotiating bank pays for the beneficiary and expects to be repaid. 8. The negotiating bank sends the documents to the paying bank for reimbursement. The paying bank is often called reimbursing bank which pays to the beneficiary on behalf
