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Irrevocable letter of credit - безотзывный аккредитив

Give short answers to these questions about the text:

  1. Was Peter paid immediately for the cloth?

  2. Who applies for a L/C, the importer or the exporter?

  3. Who issues a L/C?

  4. If a L/C is not irrevocable, who might not pay?

  5. If a L/C is not confirmed, who might not pay?

  6. Can you discount a L/C?

  7. Do you think an exporter would rather be paid by B/E D/P or by L/C?

  8. How many reasons can you think of why importers or banks might not pay a B/E or an unconfirmed revocable L/C?

6. Translate the request to open a l/c:

OLD AUSTRALIAN BANK Pty REQUEST TO OPEN

INTERNATIONAL DIVISION DOCUMENTARY CREDIT

I7 MAIN STREET Date 29 July 2000

MELBOURNE

Please open for my/our account a Documentary Credit, in accordance with the undermentioned particulars.

Signed BRUCE SMITH Harbour Imports Pty, Billabong St., Melbourne

Entries must not be made in this margin

*Delete as necessary

Type of credit

Method of advice

Advising bank

Name & address of beneficiary

Amount

Availability

Documents required

Quantity &

Description of goods

Price per unit

Terms & relevant port or place

Dispatch/Shipment

Documents to be presented

Special instructions

*'Irrevocable i.e. cannot be cancelled without beneficiary's agreement

*Revocable i.e subject to cancellation

*Airmail/cable

Counts Bank plc, Manchester, UK

Clothco Ltd, Cotton Lane, Manchester, UK

£ 900 say nine hundred pounds sterling

Valid until 31 October 2000 in Manchester for *acceptance/payment

This credit is available by drafts drawn at 90 days sight/accompanied by the required documents

Commercial invoice in three copies

Full set Bills of Lading to order marked *freight paid/freight payable at destination and ‘Notify Harbour Imports Pty, Melbourne

or

Air consignment note for goods addressed to

Combined transport marked *Freights paid/freight

document payable at destination

Insurance certificate. Risks as follows: All risks

Other documents:

Import licence No LHDL 66 2000

6 cases cloth

£ 150

*CIF, C&F, FOB,FAS, FOR etc.Melbourne

From Liverpool to Melbourne

For *payment/acceptance within 14 days of the date of issue of the shipping documents

None

Translate and answer the question:

This is the Letter of Credit Bruce's bank issued for the consignment from Clothco. Unfortunately the bank clerk mixed up his request with another request. How many mistakes can you find in the L/C?

NAME OF ISSUING BANK Old Australian Bank Pty International Division 17 Main Street Melbourne

REVOCABLE DOCUMENTARY CREDIT Number 15927

Place and date of issue Melbourne, 2 August 2000

Place and date of expiry 30 September 2000 at counters of advising bank

Applicant Clothco Ltd, Cotton Lane, Manchester, UK.

Beneficiary Harbour Imports Pty Billabong Street Melbourne

Advising bank Ref no. Counts Bank plc Old Street Manchester

Amount £ 600 (six hundred pounds sterling)

Shipment/dispatch from Melbourne for transportation to Liverpool

Credit available with Counts Bank, Manchester By PAYMENT ACCEPTANCE against presentation of documents detailed herein and of your draft(s) at 90 days drawn on Harbour Imports Pty

Commercial Invoice in two copies. Air Consignment Note for goods dispatched to Harbour Imports Pty Billabong Street, Melbourne marked 'Freight payable at destination'. Import Licence No. FNPJ 77 2000

covering 9 cartons cloth

Insurance Certificate covering all Risks C & F Melbourne

Documents to be presented within 17 days after date of issue of shipping documents

We hereby issue this Documentary Credit in your favour.

James Fletcher

Old Australian Bank Pty International Division 17 Main Street Melbourne This document consists of 1. signed page

Corrections: Bruce wrote to the bank telling them of the mistakes in the L/С and giving them the correct information. Complete these sentences withshould have beenor should not have been, like this:

The L/C ………….. irrevocable.

The L/C should have been irrevocable. It should not have been revocable.

  1. The date of expiry…….30 September 2000.

  2. The applicant …….Clothco Ltd.

  3. The beneficiary………Clothco Ltd.

  4. The amount…………..

  5. The shipment ………..dispatched from Liverpool to Melbourne.

  6. The shipping document………..an air consignment note.

  7. The B/L……..marked “Freight paid”.

  8. The import license number………

  9. The terms…………….C&F.

Write a description of these transactions as if you are the exporters and importers. In each case, describe the transaction which is better for you:

              1. GLM sent a consignment of micro-processors from Liverpool to BJT in Australia. The price was 1,000. BJT paid with a Bill of Exchange, D/P.

              2. BOS London sent a consignment of stationery to DOM in Japan. The price was 750. DOM paid with a Bill of Exchange, D/A.

Start: (name of company) loaded the (type of goods) on board ship in (name of port) and received the Bill of Lading. They then wrote the Bill of exchange…..etc.

Or: We loaded the (type of goods) on board ship in (name of port) and……etc.

Write a Bill of Exchange for the GLM-BJT consignment in Exercises 3 and 8.

Translate information about irrevocable letter of credit.

Draw a transaction plan as a diagram:

Here is what typically happens when payment is made by an irrevocable letter of credit confirmed by a U.S. bank. Follow the steps in the illustration below:

  1. Exporter and customer agree on terms of sale.

  2. Buyer requests its foreign bank to open a letter of credit.

  3. The buyer’s bank prepares an irrevocable letter of credit (LC), including all instructions, and sends the irrevocable letter of credit to a U.S. bank.

  4. The U.S bank prepares a letter of confirmation and letter of credit and sends to seller.

  5. Seller reviews LC. If acceptable, arranges with freight forwarder to deliver goods to designated port of entry.

  6. The goods are loaded and shipped.

  7. At the same time the forwarder completes the necessary documents and sends documents to the seller.

  8. Seller presents documents, indicating full compliance, to the U.S. bank.

  9. The U.S. bank reviews the documents. If they are in order, issues seller a check for amount of sale.

  10. The documents are airmailed to the buyer's bank for review.

  11. If documents are in compliance, the bank sends documents to buyer.

  12. To claim goods, buyer presents documents to customs broker.

  13. Goods are released to buyer.

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