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Credit services
Editor:admin  Date:2014-08-18  Browse:10523 Text Size Print

Letter of credit is a bank (ie, the issuing bank) in accordance with the importer (ie the applicant) requirements and instructions for exporters (ie the beneficiary) issued, authorized exporter or importer issuing bank draft drawn , at the time of delivery to ensure compliance with the terms of the credit bills and documents, must ensure acceptance and payment documents. 

Whether to follow the letter of credit with its documents, divided into light ticket credit and documentary credit two categories. Mainly used in international trade is with the single letter of credit, we generally analyze documentary credit. 
While credit is a major international trade payment, but it is no uniform format. However, its main content is basically the same, generally include the following aspects. 
(A) a description of the credit itself: the type of credit, nature, number, amount, issuing date, expiry date and maturity location, name and address of the parties, the right to use the possibility of credit transfer. 
(2) The drawer, payer, duration and ticket terms. 
(3) the name of goods, quality, size, quantity, packaging, transportation signs, price and so on. 
(4) the requirements for transportation: No shipment deadline, loading port, the port of destination, mode of transport, freight prepaid, can partial shipments and transhipment, etc. 
(5) requirements for documentation: document types, names, content, and number of copies. 
(6) Special conditions: according to changes in the political and economic trade in the importing country or a specific business needs of each, may make different provisions. 
(7) the issuing bank to the beneficiary and holder of a bill payment guarantee responsibility sentences. 
Credit operational processes [1] 
Process briefly documentary credit operations is as follows. 
(A) require the use of both buyers and sellers with a single letter of credit in trade contracts. 
(2) the buyer notified the local bank (issuing bank) to open a letter of credit in favor of the seller. 
(3) request the issuing bank or another bank notice confirming letters of credit. 
(4) notify the seller notice, letter of credit has been opened. 
(5) the seller has received the letter of credit, and to ensure that it can fulfill the conditions stipulated in the Credit, namely the shipment. 
(6) the seller after shipment, retrieve the original bill of lading from the shipping company, and produced other documents. 
(7) The seller will submit the documents to the designated banks. The bank may be the issuing bank or the credit specified payment, acceptance or negotiation bank. 
(8) the bank to examine the documents in accordance with the letter of credit. Such documents meet the credit requirements, banks will be stated in the credit payment, acceptance or negotiation. 
(9) other than the issuing bank lines to send the documents to the issuing bank. 
(10) After issuing bank to examine the documents are correct, in the form agreed upon in advance, in accordance with the letter of credit for payment, acceptance or negotiation of bank solvency. 
(11) notify the issuing bank redeem the buyer, the buyer after payment. 
(12) (13) documents to the buyer with the shipping company to deliver goods. 
Credit Project 
A letter of credit name, form, number, issuing date, the beneficiary, applicant, the credit amount, expiration date. 
Two. Drawer, payer, bill deadline, the bill in terms of votes. 
Three. Shipping documents in the commercial invoice, bill of lading, other documents. 
Four. Goods described in goods name, quantity, unit price. 
V. transportation provisions in the port of loading, unloading port or destination, the shipping deadline, the possibility of partial shipment, the possibility of transhipment. 
Six. Confirmation, factoring terms. 
Seven issuing bank instructions on negotiating bank terms, to negotiate the terms of the amount of endorsement, cable exchange method, send a single method. 

Credit Features 
Features letter of credit is: 
A negative first issuing bank payment obligations; 
Second letter of credit is a separate document, not attached to trade contracts; 
Three. Credit business is processing documents, regardless of the goods. 
Four. Credit according to the same document, just the same principle. 
Bank credit operations 
Operation of bank credit is: 
The first stage, international trade buyers and sellers to trade contracts agreed in a letter of credit; 
The second phase, bought the direction of the location of the bank for issuing. Issuing letters of credit to pay a certain amount of deposit, or ask a qualified third party companies guarantee. 
The third stage, the issuing bank on the contents of the application out to the seller as beneficiary of the letter of credit, and then through the seller's premises bankers will transfer the credit to the seller; seller after receiving the letter of credit, letters of credit and after checking compliance with contract terms, after confirming letters of credit qualified delivery. 
The fourth stage, the seller after delivery, shipment made relevant documents, in accordance with the provisions of the letter of credit, to the local bank for negotiation of payment. 
The fifth stage, negotiating bank credit verification and related documents after passing the bill in accordance with the amount of interest and fees deduction, the advance payment to the seller. 
The sixth stage of negotiating bank drafts and bills of lading will be sent to the issuing bank accounts receivable, after the issuing bank drafts and related documents received, notify the buyer payment. 
After the seventh stage, the buyer notified the issuing bank, the issuing bank to effect payment. Redeem is delivered in addition to the issuing bank deposit after issuing prepaid credit balance of the purchase price. 
The role of bank credit 
The role of bank credit has a variety of: 
First, to guarantee payment of the role: As the seller of a country do not understand the credibility and ability to pay the buyer of another country only under prepaid payment or a bank letter of credit conditions will be shipped. Because the buyer bank provides credit guarantees. 
Second, the role of financing: the seller before the credit expires in urgent need of money, you can get a loan from the credit pledge third person at (or bank). The buyer may also apply for bank advances proposed credit. 
The third is to facilitate the role: In addition to letters of credit secured financing payments and provide services, but also for the convenience of buyers and sellers have effect. Credit investigation of both sides, to guarantee registration or pledge handle payment arrangements and so was the credit simplified. 
The role of the bank guarantee letters of credit 
Credit also provide security role in international trade. International trade buyers and sellers signed a contract for the sale of goods, the two sides will choose to use the credit method in terms of the contract as a means of payment. Usually buy the direction of his application to open a bank letter of credit. Relations in the credit guarantee, the buyer called the "issuer" or "applicant", the bank called the "issuing bank", and the seller is called "beneficiaries." Since the credit is provided by the banks, so the banks from providing guarantees role: Banks will be paid to the seller. After the seller shipped, obtain documents. The seller received payment in the issuing bank, the documents to the bank in time, and then transfer the goods right bank documents to the buyer. The buyer at the time of application for a bank letter of credit, the bank delivered a certain percentage of deposit. The remaining amount must be delivered to the bank when the buyer receives the goods. So, from the operation of the process, we can see that the bank provides credit, letter of credit is also a guaranteed contract. 

Credit species 
A documentary credit (DOCUMENTARY CREDIT): is a virtue alone documents with a single bill or payment of letters of credit. Credit vast majority of international trade settlement is used in the documentary credit. 
Second light ticket credit: documents are not included with bill payment letter of credit. 
Three revocable letter of credit (REVOCABLE CREDIT): refers to the issuing bank to open letters of credit without having to obtain the consent of the beneficiary reserves the right to withdraw the letter of credit. 
Four irrevocable letter of credit (IRREVOCABLE CREDIT): refers to the letter of credit, once opened, within the validity period, and by the consent of parties interested in the letter of credit, the issuing bank can not unilaterally modify or revoke the letter of credit. Such credit uses a maximum in international trade. 
Five confirmed letter of credit (CONFIRMED CREDIT):. Refers to another bank outside by the issuing bank to add its confirmation of letters of credit. Confirmed letter of credit is a credit not understand the main beneficiary (exporter) the issuing bank, the National Council of the issuing bank, exchange control worry too much, but require confirmation and fear of not being paid payment requirements, so that the money the recovery has been double protection. 
Six at sight: the issuing bank or paying bank after receipt of the letter of credit in line with the provisions of drafts and documents, letters of credit payment obligation immediately. 
Seven long-term credit: when the issuing bank or paying bank received the documents comply with the letter of credit, do not immediately pay, but wait until the expiration of the credit bill payment obligation. 
Eight red clause letter of credit (RED CLAUSE):. Allow exporters to pay a single loading before you can withdraw all or part of the purchase price of the letter of credit. On the letter of credit issuing bank to add the above terms, usually labeled in red, so that such letters of credit referred to as "red clause letter of credit." 
Nine of payment (PAYMENT), acceptance (ACCEPTING), negotiation (NEGOTIATING) Letter of Credit: A credit should indicate their settlement method is the use of sight or deferred payment, acceptance or negotiation to use the credit amount. 
X. transferable (TRANSFERABLE) Credit: refers to the issuing bank authorized under the notification requirements of the beneficiary line, you can transfer all or part of the credit to a third party, namely the second beneficiary of the letter of credit. Transferable letter of credit can only be transferred once, after the credit transfer, that is, from the second beneficiary handle delivery, but the original beneficiary certificates, the first beneficiaries will still be responsible for the sale on the seller's responsibility. If you allow the credit may repackage, credit separately transferable to several second beneficiary, such a transfer can be seen as a transfer. Non-transferable letter of credit refers to the right to credit the beneficiary can not be transferred to the credit of others. 
Eleven-back (BACK-TO-BACK) credit: credit line is requested to advise the beneficiary on the basis of the original, open a new credit, the main trade between the two countries can not be directly when, by a third party to carry out trade. Can be transferred back to back letters of credit and letters of credit card transactions are generated in the middle, to facilitate the middlemen who. 
A broker who sold a commodity to foreign importers, please open the importer in favor of his first letter, and then purchase the same goods or actual delivery to the local people in third countries, and to foreign importers open to the first letter of credit as a guarantee, request the advising bank or any other bank or a third country for the actual delivery of local people to open another second letter of credit to the seller (brokers) as the second letter of credit applicants. Whether he can get paid according to the first letter of credit, to be responsible for repayment of the bank to pay under the second letter of credit. 
Twelve off credit: both importers and exporters of each other, each other off credit applicants and beneficiaries. To achieve a balance between the two sides of money, the use of each other's way to open letters of credit, linked to exports and imports. The first letter of credit beneficiary is the second letter of credit (also called back card) of the applicant; applicant first credit card is back beneficiaries. First notify the credit line is often the back card issuing bank, roughly equal amounts of the two cards. 
Thirteen cycles (REVOLVING) letter of credit: revolving credit can be repeated use of the credit cycle, when the amount of the credit is all or part of after use, still went back to the original amount. Buyers and sellers to enter into long-term contracts, partial delivery, the importer in order to save the issuing procedures and costs, you can open a revolving letter of credit. Revolving letter of credit can be divided into two kinds of credit by time and by the amount of the credit cycle cycle. 
Fourteen partial credit part of the collection: a transaction contract may sometimes include two different payment methods, such as part of the letter of credit, part of the collection methods. That part of the purchase price, if 80 percent by importers open letters of credit, and the remaining 20% by the exporter after shipment, with shipping documents under letters of credit, letters of credit be commissioned by the negotiating bank to the issuing bank importers collection. Credit partial payment and collection partial payment, to separately open bill, complete shipping documents attached to the bill under the credit for clean collection under.

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