【正文】 2022/6/3 Chapter 13 Urging Establishment of L/C 2022/6/3 Documentary Letter of Credit (L/C) ?A documentary L/C is an agreement with banks, made by an importer, to pay an exporter, provided certain conditions are fulfilled. ?The importers apply to one of their bankers to issue the L/C in favor of their suppliers through a bank in the suppliers’ country. 2022/6/3 Key terms ?documentary L/C 跟單信用證 ? The importer avoids risk of the seller’s default to deliver goods, because the payment is made to the seller only after documents certifying goods delivery are produced. 2022/6/3 2022/6/3 2022/6/3 Further Operation of an L/C ?5. The seller, after getting the L/C, effects shipment of the ordered goods, and then goes to a negotiating bank (議付行 ) for his proceeds (貨款 ) by presenting the necessary shipping documents. (Sometimes the advising bank can act as the negotiating bank.) 2022/6/3 Further Operation of an L/C Further Operation of an L/C ?6. After making payment, the negotiating bank send the shipping documents to the issuing bank and at the same time asks for the reimbursement (付還 ) of the money it has paid to the seller as proceeds. 2022/6/3 Further Operation of an L/C ?7. The buyer reimburses the payment by the issuing bank and gets from it the shipping documents. ?8. The buyer finally takes delivery with the shipping documents. 2022/6/3 ? If the importers wish to guarantee payment of the L/C, they will ask their banker to issue an irrevocable （不可撤銷的） one. An irrevocable L/C is one which the issuing bank can not revoke without consent from the exporter. This means the credit cannot be exchanged without the exporters’ and bankers’ agreement. irrevocable L/C 2022/6/3 Documentary Letter of Credit the beneficiary should attach all shipping documents required. 2022/6/3 Documentary Letter of Credit ?If, in addition, the importers want the advising bank in the sellers’ country to guarantee the L/C, they will request confirmation by the advising bank. The L/C then bees a confirmed irrevocable L/C (保兌的不可撤消的信用證 ). 2022/6/3 Confriming bank (保兌銀行 ) ? When an L/C is confirmed by another bank in addition to the issuing bank, both the two banks are responsible for the payment to the beneficiary. This doublegurantee L/C is the safest protection of the exporter’s interest. In usual practice the confirming bank is th advising bank or a bank with very high reputation. 2022/6/3 Documentary Letter of Credit ?Use of documentary credits is subject to Uniform Customs and Practice (UCP) for documentary credits (跟單信用證統(tǒng)一慣例 ), brochure of the .（ International Chamber of Commerce 國際商會 . Most banks worldwide adhere to these rules. 2022/6/3 All letters of credit contain these elements: ? a payment undertaking given by a bank (issuing bank) ? on behalf of a buyer (applicant) ? to pay a seller (beneficiary) a given amount of money ? on presentation of specified documents representing the supply of goods ? within specified time limits ? these documents conforming to terms and conditions set out in the letter of credit ? documents to be presented at a specified place 2022/6/3 Sample Letter of Credit 2022/6/3 Buyer’s obligation ?When a transaction is concluded, the buyer as a rule is under obligation to establish / open (開立 ) a letter of credit whit his bank within the time stipulated in the sales contract or sales confirmation. 2022/6/3 Buyer’s obligation ?It is the usual practice in our export trade that the letter of credit is to be established and to reach the seller one month prior to the date of shipment to give the seller ample time to make preparations for shipment, such as making the goods ready and booking shipping space. 2022/6/3 The need to urge establishment of L/C ? If the buyer fails to establish the letter of credit, or the letter of credit does not reach the seller in time, a letter or a fax, has to be sent to the buyer to urge them to expedite the L/C or to ascertain its whereabouts. Messages urging establishment of letter of credit must be written with tact. Their aim is to persuade the buyer to cooperate more closely and in fact to fulfill his obligations 2022/6/3 Difficult Words ?expedite: to speed up the progress of加速 . The builders promised to expedite the 。 ?ascertain: to discover with certainty, as through examination or experimentation. 查明，弄清