【正文】 Transferable Credit (6) Issuing Bank 1Transferable LC Transferring Bank 2Transferred LC 2nd beneficiary GBP16,000, GBP160 per ton GBP12,000, GBP120 per ton GBP12,000 X (1+10%)=13,200 GBP16,000 X (1+10%)=17,600 The insurance document handed in by 2nd beneficiary could not be used by 1st beneficiary under transferable LC. Type of LC。 increase of amount and extension of expiry in the original (transferable) LC， usually not allowed (retain the rights on amendments) to inform 2nd beneficiary, for the trader wants to retain the benefit for himself). 167。 Transferable Credit (2) Flow chart of the transaction 1. Middleman normally does not produce anything 2. He earns narrow margin from the difference between selling price and buying price. Trader Contract Importer GBP 16,000 GBP160 per ton Contract Exporter GBP 12,000 GBP120 per ton His margin is GBP4000 The trader must try to cut down price with seller and raise price with buyer in his negotiation with seller and buyer. Type of LC。 Transferable Credit (1) Flow chart of the transaction Exporter 2nd beneficiary 7Dispatch goods Importer 8Present documents Transferring Bank 10Advise to change B/E amp。 claim on Issuing Bank 12Reimburse $100 8 Pay interest $10 9Docs Suppose LC amount is $100 If docs ply with LC, Issuing Bank accepts time draft amp。 Negotiating Bank 7Adv. Exporter beneficiary Importer Applicant 8Dispatch goods as quickly as he can before Issuing Bank’s cancellation Carrier 9Docs. 10If nominated bank decides that documents ply with LC before receipt of cancellation , Issuing Bank can not cancel LC any more. 8Applicant can revoke LC at any time, if market is unfavorable. 1Contract Term of payment: Irrevocable Documentary Credit 2Apply Importer Applicant Issuing Bank 3Irrevocable Documentary credit: It can not be revised or cancelled without consents of all the major parties. Confirmation Instruction: Without( with)your confirmation) () Advising Bank 4Advise Exporter Beneficiary Types of LC: Irrevocable Unconfirmed LC This kind of LC has expressly undertaking of Issuing Bank and most widely used in the world at present. 3Apply for Confirmed LC Issuing Bank 5Advise confirmed LC Type of LC: Confirmed Credit (1) 2Contract, Term of payment: Irrevocable Documentary Credit Importer Applicant Exporter Beneficiary In the importing country, there might be: strike war exchange control Possible bankruptcy of issuing bank, etc. All these factors might delay or stop payment under LC. 1He can demand that LC be confirmed by a confirming bank in his own country, . by advising bank or other banks 4Documentary credit Advising Bank Confirming Bank Confirmation Instruction: (P151) Confirmed (by Advising Bank) Confirming fee is borne by applicant. Issuing Bank If Issuing Bank finds discrepancies in the docs., it would refuse to reimburse Confirming Bank. 3Returned docs. and refuse to reimburse 2Forward doc. and claim on Exporter Beneficiary Advising Bank can refuse to confirm if it finds political and transfer risks of importing country are unbearable, for Confirming Bank’s payment is without recourse just as Issuing Bank is. 1Pay without recourse when deciding documents conforms to LC. Advising Bank Confirming Bank So, Confirming Bank collects as high the fee as Issuing Bank, for their risks are the same. Confirming Bank can refuse to accept the amendments of LC which might exceed its confirming limit to certain country risk. Type of LC: Confirmed Credit (2) Double guarantee: If pliant docs., Confirming Bank must pay if Issuing Bank goes bankrupt. Issuing Bank must pay if the former goes bankrupt. Issuing Bank Exporter Beneficiary Type of LC: Confirmed Credit (3) Confirming bank can be another bank except for Advising Bank and be found by beneficiary itself though Issuing Bank does not ask for confirmation. Confirming Bank Advising bank Find a Confirming Bank by it self and on its own account. This is silent confirmation. Beneficiary must hand in documents to Confirming Bank. Otherwise, Confirming Bank’s responsibility is automatically discharged. Forward documents directly to issuing bank bypassing Confirming Bank. 1Contract Term of payment: Documentary Credit 2Apply Importer Applicant Issuing Bank 3Documentary credit Advising Bank 4Advise Exporter Beneficiary Type of LC: Unconfirmed Credit Unconfirmed Unconfirmed If importer’s country risk and Issuing Bank’s risk is endurable, there is no need to have LC confirmed by another bank for additional cost. Endurable 1Contract Term of payment: DC Sight Payment 2Apply Importer Applicant Issuing Bank 3Documentary credit Advising Bank Issuing Bank’s a/c 4Advise Exporter Beneficiary Type of LC: Sight Credit If documents ply with LC, Paying Bank would debit Issuing Bank’s a/c amp。 tech. terms. Applicant Issuing Bank Applicant must obtain application forms from Issuing Bank, filling in, sign and stamp them and then hand them to issuing bank for opening LC. Applicant must hand in to issuing bank: mission for issuing LC deposit to be paid under LC by Issuing Bank Issuing Bank guarantees payment with applicant’s deposit(money), not with Issuing Bank’s money. Issuing Bank signs and stamps the application forms filled in by applicant and returns one to applicant as formal contract between applicant and Issuing Bank who must follow it. Basic documentary credit procedure (2) 1Apply Importer Applicant Issuing Bank 2Documentary credit Advising Bank 3Advise