PAYMENTS IN FOREIN TRADE - LETTER OF CREDIT
PAYMENTS IN FOREIN TRADE - LETTER OF CREDIT ü Translate in writing Letters 2, 4, 5. Prepare the sight interpretation of letters 1, 3, 6. ü Learn the vocabulary.
STEP 1. The Seller (beneficiary) and the Buyer (applicant) make a sales contract providing for payment by letter of credit. STEP 2. The Buyer instructs his bank (issuing bank) to issue a credit in the Seller’s favour. STEP 3. The Buyer’s bank issues a letter of credit and asks the Seller’s bank (advising bank) to advise of opening a credit. STEP 4. After shipment the Seller is to submit to his bank (confirming bank) shipping documents to prove shipment. The bank releases money out of the letter of credit against the documents.
LETTER 1 (Establishing a documentary credit) June 8, 20... New Zealand Bank Takapuna Street Wellington 9
Dear Sirs
Please establish an irrevocable documentary credit for 25000 pounds in favour of Delta Computers Ltd., England. I have enclosed your application form with all the relevant details completed.
We will appreciate it if you inform us when you have made arrangements with your agents in London.
Yours faithfully G. Turner N.Z. Business Machines
Encl. Application form for documentary credit
LETTER 2 (Informing of details on LC) June 15, 20... Delta Computers Ltd. Bradfield Road Northamptonshire NN8 4HB United Kingdom
Dear Mr James
Thank you for replying to our enquiry of May 28, 20... and letting us know that C2000 computers are available.
The terms you quoted are quite satisfactory, and you will find our order enclosed. We have instructed our bank, New Zealand Bank, to open an irrevocable and confirmed letter of credit for 25,000 pounds in your favour. This should cover c.i.f. shipment and bank charges, and the credit is valid until June 20...
You will receive confirmation from our bank’s agents Eastland Bank Ltd., London, and you may draw on them at 60 days for the amount of the invoice. Please enclose the following documents, when submitting your draft:
Please inform us as soon as you have arranged shipment.
Yours sincerely G. Turner N.Z. Business Machines
Encl: Order
LETTER 3 (Instructions on drawing drafts against credit) June 20, 20... Delta Computers Ltd. Bradfield Road Northamptonshire NN8 4HB
Dear Sir,
Please find enclosed a copy of the notification we received yesterday from the New Zealand Bank, Wellington, to open an irrevocable letter of credit in your favour for 25,000 pounds which will be available until June 28, 20....
You may draw on us at 60 days against the credit as soon as you provide evidence of shipment. Please enclose with the draft the following documents:
Your draft should include our discount commission which is five per cent, and our charges listed on the attached sheet.
Yours faithfully, S. Merroway Documentary Credits Department
LETTER 4 (Forwarding shipping documents and draft after shipment) June 25, 20... Mr S. Merroway Eastland Bank Ltd. 401 Aldgate, London EC1
Dear Mr Merroway
Thank you for your advice of June 20, 20... We have now effected shipment to our customers in New Zealand and enclose the shipping documents you asked for and our draft for 26,250 pounds at 60 d/s which includes your discount, commission and charges.
Please accept the draft and remit the proceeds to our account at the Midland Bank, Oxford Street, London W1.
Yours sincerely R. Brown Senior Shipping Clerk
LETTER 5 (Debiting account) July 1, 20... Mr Turner N.Z. Business Machines 100 South Street Wellington
Dear Mr Turner
In accordance with your instructions of June 15, 20... our agents, Eastland Bank, London, accepted a draft for 26,250 pounds drawn by Delta Computers Ltd. on presentation of shipping documents for a consignment sent to you on June 10, 20... We have debited your account with the amount plus our charges of NZ$300. The documents are now with us and will be handed to you when you visit us.
Yours sincerely O. Dobbin Manager LETTER 6 (Credit letter)
Issuing Bank Limited International Division 23, High Street London C.W. 25 Date of Expiry Date of issue This credit is sent to the advising bank by airmail. Applicant Beneficiary Agropharm Limited Medexport Moscow Advising Bank Amount: USD 40,000 CIF Moscow (US dollars - forty thousand only) Narodny Bank LTD REF. NO.... CIF Partial Shipment allowed Transhipment allowed Shipment from Russian Sea Port to Hull Not later than...
Dear Sirs
We hereby issue in your favour this irrevocable Documentary Credit as per details stated above, available by negotiation of your drafts at sight drawn on the applicant (...) for full invoice value of shipment purporting to be 20,000 kg of... accompanied by the following signed documents...
|
