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Katalin Csek
independent
dependent
payment in advance
The seller does not want to suffer double default: To be out of the possession of the goods; Not to receive the value of the goods; The buyer wants to have a control on the goods before paying the price of them;
Documentary Credit 1.
Usage set up by the International Chamber of Commerce; The latest version: UCP 600; The predecessor is the Commercial letter of credit (CL/C); The electronic form has already been introduced; Term: An irrevocable promise of payment undertaken by a bank on the behalf of its own as to the terms of its own to a named beneficiary;
Payment will be effected by the bank, provided: the stipulated documents are submitted without any discrepancy: full compliance with each other and with terms of documentary credit itself; within the expiry date, at the nominated or issuing bank;
his bank= issuing bank to issue a documentary credit= to undertake an irrevocable promise to pay to the seller=beneficiary; 2. The buyer concludes a contract of reimbursement and lays a coverage for the value of the goods + banking charges; 3. The Buyers bank= issuer issues the doc. credit, which is a contract including the promise of payment and send it as a SWIFT message to the sellers bank =advising bank; 4. Advising bank= a bank which has been nominated by the issuer to give a notice upon the issuance towards the seller; 5. Involved banks can be nominated to other functions such as: confirmation, negotiation, paying;
Type of Credit: irrevocable ( or revocable; confirmed; freely negotiable); Name, and address of the beneficiary; Name and address of the applicant, buyer; The total amount of the documentary credit; Unit price; The quantity of goods; Delivery term as to Incoterms 2000/2010; Delivery time; Expiry date and place; The (brief) description of the goods; The specific type and the required copies of documents; Transhipment; Partial shipment;
Irrevocable (revocable)= can not be unilaterally modified or cancelled, Confirmed; At sight= after checking it the bank pays; Deferred=after checking it the bank pays..days after (commonly) from on board time; Acceptance=after checking the issuer or confirmer accepts a bill of exchange drawn upon the bank and pays on the due date of the B/E; it is a specific form of the deferred type; Back to back; Transferable; Red clause; Revolving;