Introduction of the hottest advance letter of cred

2022-08-12
  • Detail

Introduction of L/C in advance

the characteristic of L/C in advance is that the importer pays first and the exporter delivers later. It is a kind of preferential and financing convenience that the importer gives to the exporter. When negotiating with the buyer and the seller, the exporter shall propose payment terms to the importer, and the amount and method of advance payment shall be listed in the letter of credit. With the consent of the importer, the importer shall fill in and sign the letter of credit application to make it clear

(II) applicable trade mode of advance letter of credit

1 Contract goods are short of supply in the market. Importers adopt preferential and competitive payment methods in order to obtain goods as soon as possible to meet the urgent needs of the market

2. The exporter is short of funds or has poor capital turnover. The exporter requires the use of an advance letter of credit, but the importer can take this opportunity to provide preferential payment methods as a reason to lower the price

3. In order to search for the source of goods and catch the source of goods in time, the importer opens the advance letter of credit to the agent or consignor in the export place, seizes the tight commodities in time and flexibly, and competes with its competitors by means of advance payment

(III) types of advance letters of credit

1 L/C of full amount in advance

the practice of L/C of full amount in advance (cleanpaymentcredit) is that the exporter issues a clean bill to advance the full payment, also known as the prepayment method. In addition to issuing a clean bill, a statement must be attached, which states that the exporter is responsible for delivering the documents required by the letter of credit to ensure timely delivery

if the beneficiary fails to make up the documents or misappropriate the advance for other purposes, or fails to purchase the contracted goods specified in the contract, the advance bank will not bear the risk, and its risk should be repaid by the importer or the issuing bank in accordance with the terms of the letter of credit

2. Red clause letter of credit

red clause letter of credit (redclauseletterofcredit) is used to advance part of the amount listed in the letter of credit. The terms of the advance part of the amount are printed in red to show clarity and eye-catching, so it is called red clause letter of credit

in international trade practice, in recent years, the terms of some advances have not been written in red, which can also be used universally

the content of the red clause must indicate that the exporter is allowed to advance part of the amount, and then the bank will deduct the principal and interest of the advance and pay off the balance after making up the documents on the specified date

the importer agrees to adopt the letter of credit with red terms. In case of any risk, the advance payment shall be borne by the importer, so it should be done carefully when adopting the letter of credit with red terms

3. Regularly check and revise the green clause letter of credit of hydraulic testing machine

the function of green clause letter of credit is similar to that of red clause letter of credit, but the content and practice of green clause letter of credit are more strict than that of red clause letter of credit

the practice of adopting green terms letter of credit means that the exporter must store the contract goods purchased with the advance funds in the warehouse in the name of the bank, and deliver the warehouse documents to the bank for holding, so as to ensure that the advance amount is used in accordance with the provisions of the letter of credit, and all parts of the pressure controlled experimental machine are made of parts produced by internationally renowned manufacturers, so as to reduce the risk of misappropriation of funds

in the practice of international trade, when the importer agrees to adopt the green clause letter of credit, the importer must provide guarantee or mortgage to the issuing bank. Generally speaking, the amount of advance under the green clause letter of credit is large, so in order to clarify its function, the word "greenclausecredit" must be indicated in the letter of credit

4. Packingletterofcredit is also called packingloan. Its function is to indicate that after receiving the letter of credit, the exporter advances a certain amount of money to the bank according to the terms of the letter of credit for the purchase of contracted goods and packaging and shipment, and the principal and interest of the amount advanced after shipment are deducted during negotiation. This practice is a kind of "pre shipment finance" given by the bank where the exporter is located to the exporter

the financing bank must bear the risk of financing advances. In order to reduce risks, banks sometimes require exporters to provide collateral and go through relevant procedures when making advances

(IV) functional terms applicable to advance letters of credit

1 The advising bank is hereby authorized to allow the beneficiary to advance an amount not exceeding US $200000 (20% of the amount of this credit). With the advance payment under this letter of credit, human beings will continue to obtain new results on the road of uncovering the secret of metal fatigue according to the payment. On the same day, the exchange rate will be published and the interest will be paid. The advance shall be deducted from the amount of the draft under this credit

TheNegotiatingBankisherebyauthorizedtomakeadvancetotheBeneficiaryuptoanaggregateamountofU. S.$200,000(20oftheamountofL/C).

Theadvances,withtheinterestatrulingrateofexchangeatthetimeofpaymentofsuchadvance,aretobedeductedfromtheproceedsofthedraftsdrawnunderthiscredit. [page]

or use another expression as follows:

herebyauthorizeyoutomakesuchadvances, whicharetoberepaid, within, fromthepaymenttobemadeunderthiscredit

isunderstoodthatthemakingofthetemporaryadvancesorthepaymentstotheabovementionedBeneficiaryshallbeoptionalonthepartofyou.

(V) who advances the advance payment

an advance letter of credit is an exporter's advance payment of all or part of the amount under the aging resistance of the letter of credit to the negotiating bank or a designated bank by issuing a clean bill and signing a letter of guarantee in accordance with the terms of the letter of credit (ensuring that documents will be submitted later)

who will advance the advance payment if the advance letter of credit is adopted? There are the following methods of advance payment:

1 Advance payment directly by the importer: the importer must provide

Copyright © 2011 JIN SHI