4.2. Read the text.

A letter of credit (l/c) is a letter from one bank to another by which a third party, usually a customer, is able to obtain money. Letters of credit are becoming increasingly common because they are a guarantee for the customer.

They are particularly popular with Asian customers. For example, a Chinese customer places an order with Pavesi, The customer opens a letter of credit with their bank and this letter states delivery and payment terms that the supplier is obliged to follow. If the supplier fails to do so the customer does not pay. Even the slightest error, such as a spelling mistake in the address of the supplier, can block the payment because the customer's bank finds a noncompliance with the original letter of credit It sets time limits, deadlines, for the whole delivery procedure.

If the goods are not installed in time, the supplier may request an extension on the letter of credit but obviously the fact that the dates are specifically stated encourages the supplier to meet the deadlines. It also requests the documents for the payment of the goods and, if there are no problems, the customer's bank pays 90% of the sum owed upon presentation of the goods. The documents requested are;

—Various copies of the signed, original invoices (usually 5 or 6, depending on the country of destination).

—Various signed original copies of the packing list. This must be written on headed paper and be complete with the name of the customer, detailed description of the goods for each package, total number of crates, boxes, etc.

4.3. Answer the questions:

1. Why are letters of credit becoming increasingly common?

2. What does the customer opened letter of credit with their bank states?

3. What does the slightest error, such as a spelling mistake in the address of the supplier, results in?

4. In which case can the bank block the payment?

5. What does the l/c set?

6. Which documents for the payment are requested?

7. How many copies of the signed, original invoices are requested?

8. What data must original copies of the packing list be completed with?

5. Bill of lading (b/l).

5.1. Words to remember:

bill of lading (b/l)	коносамент, документ на груз
transporter (courier)	экспедитор
consignor	отправитель
consignee	получатель
clean	в хорошем состоянии
dirty	в плохом состоянии
proof of delivery	документ о доставке груза
consignment note	документ на груз при поставке авто транспортом
documents of title	документ на право владения

5.2. Read the text.

The bill of lading (b/l). This is a document that shows details of the goods being transported (the consignment), including the number of packages, weight etc, and is a receipt from the transporter (courier) to the sender (known as the consignor) and entitles the receiver (known as the consignee) to collect the goods on arrival.

The bill of lading can be defined as clean when it states that the goods sent were received by the shipping agent in good condition, or dirty when it states that the goods sent were damaged when they were received by the shipping agent It is stamped by customs as proof of delivery. If goods are transported by road, they are accompanied by the consignment note. If they are transported by train, the note that accompanies them is called a railway consignment note. Should more than one means of transport be used the document sent is a combined transport document The document covers the goods from the departure point to that of arrival. If the delivery is being made by air the document is called an airway bill. Unlike the bill of lading, these documents are nonnegotiable, i.e. they cannot change hands, and are not considered documents of title, that is to say the company's name on the document does not have possession rights of the goods. The signed insurance policy. Usually this policy must cover 110% of the value of the total supply.