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4 THE BANK ADVISES THE BUYER OF PAYMENT

Barnley’s Bank Ltd.

Queens Building Cathays Park Cardiff CF1 9UJ

14 May 20__

OAO MIM

Russia Kursk Lenin st. 24

Dear Sirs,

In accordance with your instructions of yesterday’s date we have accepted a draft for 70,000.00 euros drawn by Teletrans Inc., against surrender of shipping documents in compliance with the requirements of the L/C.

We have debited your account with the amount plus our charges. The documents will be handed to you at your earliest convenience.

Yours faithfully,

T.Snowland

T.Snowland

Credit Department

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FOCUS 2. Comprehension questions

PART I

?What is documentary credit intended for?

?What are the stages in documentary credit operations?

?What are the advantages of documentary credit?

THE EXAMPLE OF AN IRREVOCABLE LETTER OF CREDIT

?Name the Seller and the Buyer.

?Who has given instructions to issue a L/C?

?In whose favour is this L/C issued?

?Name the issuing and the advising banks.

?On what condition is the L/C available?

?What do you know about documentary credit? Are L/Cs widely used in foreign trade?

LETTER 1.1

?What request does the letter contain?

?What document is enclosed with the letter?

?What information does the application form contain?

?What information does the importer need?

LETTER 1.2

?In what way will the payment out of the L/C be effected?

?Which party is to bear transportation charges?

?Which party is to cover insurance and bank commission?

LETTER 1.3

?What do the Sellers confirm by this letter?

?What are the terms of payment mentioned?

?When will the Sellers start making up the order?

LETTER 1.4

?What are the terms of payment stipulated in the letter?

?What is enclosed with the letter?

?Is partial shipment allowed?

LETTER 1.5

?What is the Sellers’ request to the Bank?

?What is enclosed with the letter?