【正文】 Transferable Credit (7) If 1st beneficiary increases coverage % in transferred LC, . 17600/12022 x 100 ≈147% , GBP12022 (1+147%) = GBP17640 1st beneficiary could save the cost, by using 2nd beneficiary’s . It is stipulated in Subarticle 32 (f) (ii) of UCP 500 that “ the minimum amount … insurance cover to have effected is CIF or CIP Value… plus 10%, Type of LC。 Transferable Credit (5) permitted decrease in transferred LC ● the amount of the credit ● any unit price stated in the credit ● the expiry date ● the last date for presentation of documents in accordance with Article 43 ( within 21 days of shipment). ● the period for shipment 2. But there is one exception The percentage of insurance cover can be increased Type of LC。 any change in the specification of goods, usually allow to inform as quickly as it can (waive the rights on amendments, so that second beneficiary can manufacture products of right specification as soon as possible). Type of LC。 Transferable Credit (4) 3. Total amount should not exceed transferable LC precondition is that transferable LC allows partial shipment. 5. 2nd beneficiary are not allowed to transfer LC to 3rd beneficiary. Trader Applied for a transferred LC Transferring bank When the trader apply for a transferred LC, he must fill in the application indicating whether he would allow transferring bank to inform any amendment in transferable LC to second beneficiary. For example, 167。 Transferable Credit (3) 1. The trader wants to get payment guarantee from buyer bank and the seller wants to get payment guarantee from the trader’s bank. Issuing Bank 1LC Transferring bank or trader’s bank 2LC Exporter 2. The trader would ask the buyer to open a transferable LC as he does not have enough working capital to open the second LC. Transferable , the trader could transfer the usage right including some amount to the seller. Transferred Type of LC。 claim payments Issuing Bank 14payment 15payment 16docs carrier 17Take delivery of goods from Carrier Type of LC。 Invoice 1st beneficiary Trader 11Substitute Bill of Exchange amp。 Usance LC payable at sight (4) Sample P125 At the request of Tabowell…… Usance draft(s) at 180 days to be negotiated at sight basis and discount by us …... Importer 1Contract Trader=middleman Exporter Applicant 2apply Issuing Bank 3Transferable LC Advising Bank Transferring Bank 4Advise 1st beneficiary 5Apply 6Transferred LC 2nd beneficiary 1Contract Type of LC。 sells it to Discounting House. Suppose discount interest is $10. 10Sell acceptance for discounting 5Docs +time draft Discounting House 11$90 Type of LC。 Usance LC payable at sight (1) Exporter Beneficiary Importer Applicant Negotiating Bank 6Discount on sight basis 7Forward docs+ time draft amp。 credit beneficiary’s a/c with or without recourse, depending on Issuing Bank’s instruction. Sight payment / or payment Nominated Sight Payment Bank 5Docs. 6documents Issuing Bank would examine the documents to see if there is any discrepancy. Example of sight Documentary Letter of Credit At the request of Dearmei Trading Co., Ltd, Malaysia,…… available by your drafts drawn at sight on us covering 100% invoice value …… Special Clause: 1. This credit is available by draft drawn on Issuing Bank at sight……. We hereby guarantee that drafts drawn under and in pliance with the terms and conditions of this credit shall be duly accepted and paid at sight. Example on P132 Credit available with Nominated Bank: The American Advising Bank □ by payment at sight …… Against the documents detailed herein: □ and Beneficiary’s draft(s) drawn on: The French Issuing Bank, Paris, 1 Contract Term of payment: DC, Time Payment 2Apply Importer Applicant Issuing Bank 3Documentary credit Advising Bank Issuing Bank’s a/c 4Advise Exporter Beneficiary Type of LC: Time / Usance Credit If documents ply with LC, Accepting Bank would accept time draft and at maturity, debit Issuing Bank’s a/c amp。 negotiated in conformity with LC provided such negotiation has been made prior to your receipt of notice of cancellation . (In fact, there is no payment undertaking of Issuing Bank revocable LC). Advising amp。 seal of correspondent bank. If telegraphed ,check test key. Basic documentary credit procedure (3) 1Apply Importer Applicant Issuing Bank 2Documentary credit Advising Bank 3Advise Exporter Beneficiary Basic documentary credit procedure (4) If he finds in LC any terms and conditions contradictory to mercial contract, he can return (or not) the LC and demand amendment. 4Demand revision 4Return LC 4Return LC 5Apply for amendment and hand in fees 6Amendment notification 7Amendment notification Exporter Beneficiary 1Dispatch goods 3Hand in docs. within validity of LC nominated bank Carrier 2B/L Basic documentary credit procedure(5) 2The issuing date of B/L must not be later than the latest date in LC. 3Exporter must deliver the goods to carrier before or on the latest date stipulated in LC. 3Exporter must prepare other documents stipulated in LC. For example, Commodity Inspection Bureau, for Inspection Certificate Insurance pany, for insurance policy, etc. Embassy of importing country for consular invoice Health quarantine station for Health Certificate etc. Exporter Beneficiary 1docs nominated bank 2Pay / Accept / Negotiate 3Forward docs to and claim on Issuing Bank Basic documentary credit procedure(6) 2Nominated bank would examine the documents against LC on beha