【正文】 o account in using L/C Points for Attention in Using L/C The advantages of using L/Cs to sellers are reasonable assurance of payment, prompt payment and possible financing availability. The disadvantages are very strict pliance of L/C terms, more cumbersome procedures and higher expenses than other methods of payment, that is, using L/C is expensive and timeconsuming. Points for Attention in Using L/C Exporters should consider the following points to decide if the L/C should be used. ● corporate credit policy and the pany?s ability to absorb risks ● credit standing of the importer ● political environment in the importing country ● current market conditions and payment terms offered by petition ● type of merchandise to be shipped and the value of the shipment ● type of exchange controls in the importing country and the buyer?s ability to get foreign exchange L/C Risks and L/C Risk Prevention Judging from the authoritative data, % settlement for the trade are paid through L/C. Yet some risks also exist in the L/C, which mainly reflect on the following sides: ● Employment of fed documents or fake L/C ● Failure to ply with credit conditions ● The applicant may not or delay to open an L/C in order to avoid the market risks caused by the changes of market prices. ● The importer may open an illegal L/C to deceive the exporter in order to get the goods. ● The applicant may add a variety of restrictive clauses which we called “soft terms” when issuing an L/C to limit the effectiveness of the documents L/C Risks and L/C Risk Prevention Some risk prevention measures before making the decision of using L/C: ? The applicant should preview the L/C application before it sis officially established so as to avoid the trouble of subsequent amendment and the potential risks. ? Check the terms of L/C strictly to avoid the “soft terms” on receiving the L/C and verify the L/C is real or fake, legal or illegal. ? Third, prepare the whole set of documents to strictly ply with the stipulations of the L/C including mercial invoice, bill of lading, insurance policy, Customs invoice, etc. ? Finally, prepare the goods and insure the shipment in time. Specimen Letters Letter 1 Extending L/C Dear Sirs, We thank you for your L/C for the captioned goods. We are sorry that some delay our suppliers at the point of origin, we are not able to get the goods ready before the end of this month. As a result, we sent you an yesterday reading: LC1417 PLSCABLE EXTENSION SHIPMENT VALIDITY 15/31 MAY RESPECTIVELY LETFOLLOWS. It is expected that the consignment will be ready for shipment in the early part of May and we are arranging to ship it on s/s “Dongfeng” sailing from Dalian on or about 10th May. We are looking forward to receiving your revised of the above L/C thus enabling us to effect shipment of the goods in question. We thank you for you cooperation. Yours faithfully, owing to 由于 on the part of 就 …… 而言，在 …… 方面 extension n. 延長，展 證，展期 Letter 2 Amending L/C Specimen Letters Letter 2 Amending L/C Dear Sirs, We have received your L/C No. 145/88 issued by the Yemen Bank for Reconstruction amp。 承兌遠期 L/C。Chapter Eight 新編外貿(mào)英語教程 Letter of Credit Contents Teaching Objectives Text Analysis Specimen Letters Chapter Eight Skill Training Exercises 新編外貿(mào)英語教程 Teaching Objectives Upon pletion of this chapter, you will ? Have a general idea of issuance and amendment of L/C ? Recognize how to check L/C ? Understand the major items and types of L/C ? Grasp the basic writing techniques to advise, extend, amend and urge L/C Text Analysis ? Introduction to the Chapter ? Nature of Letter of Credit ? Procedures of Letter of Credit Operation Issuance of Letter of Credit Basic Items of Letter of Credit Major Types of Letter of Credit Amendment of Letter of Credit Utilization of Letter of Credit ? Consideration in using L/C Points for Attention in Using L/C L/C Risks and L/C Risk Prevention In chapter 8, the details related to L/C operations will be fully discussed. This chapter consists of three parts. The first part is a brief overview of L/C. The second part focuses on the procedures of L/C operations, in which the basic items and types of L/C, the process of issuance and amendment of L/C and the inspection of L/C will be discussed in detail. The third part demonstrates the prime considerations of using L/C. Introduction to the Chapter Nature of Letters of Credit In simple words, as a legal financial instrument, a documentary letter of credit is a conditional bank undertaking or guarantee of payment which is used to secure payment for goods and services and mitigate the risks of doing business. Nature of Letters of Credit Characteristics of using an L/C ● Letter of credit is a conditional undertaking issued by a bank at the request of the buyer, by which the seller obtains higher security in payment. ● Payment is against the presentation of the stipulated documents in pliance with the terms and conditions of the credit. ● A letter of credit is a selfsufficient instrument. Although the credit is issued on the basis of the Sales Contract, banks are in no way concerned with or bound by such contract. Pr