What about L/C's reliability
Post 1 of 6
I heard that even L/C are unreliable, but how can we distinguish it?Which countries can we rely on? Your comments and suggestion, please
23 Aug 2007 01:30
Post 2 of 6
Replying to [CathyLiu]: As far as I know, Singapore is quite safe with LC. I heard that there are lots of fake LC in China and Africa. You can do LC with third party inspection. Get a reliable company who inspects the goods before endorsing it. There should be some reputable companies but I'm sure it's not that cheap. Be prepared!![[em1]](http://img.alibaba.com/images/eng/style/icon/emoticons_smile.gif)
23 Aug 2007 09:30
Post 3 of 6
Replying to [CathyLiu]:
Any instrument is only as good as its user. There is no *perfect* method of settlement or for payment. Had there been one, no one would have used any other method. Since an LC is a bank's undertaking, the issuer must be of total integrity and reliability. Therefore, the only about an LC is: which bank has issued the LC?
Having said so, let me also say that the choice of a method for settlement depends on the circumstances, especially the relationship between a buyer and a seller, and external risk perceptions (space here is too limited to explain in full).
By external risks I mean, country risks, exchange risks, transit risks, political risks and others which an LC cannot handle or reduce in full. Still, if you know your LC mechanisms well enough, you *can* use an LC to reduce many risks significantly. There *are* ways, including selection of a good Reimbursement Clause, believe me!
Any instrument is only as good as its user. There is no *perfect* method of settlement or for payment. Had there been one, no one would have used any other method. Since an LC is a bank's undertaking, the issuer must be of total integrity and reliability. Therefore, the only about an LC is: which bank has issued the LC?
Having said so, let me also say that the choice of a method for settlement depends on the circumstances, especially the relationship between a buyer and a seller, and external risk perceptions (space here is too limited to explain in full).
By external risks I mean, country risks, exchange risks, transit risks, political risks and others which an LC cannot handle or reduce in full. Still, if you know your LC mechanisms well enough, you *can* use an LC to reduce many risks significantly. There *are* ways, including selection of a good Reimbursement Clause, believe me!
25 Aug 2007 19:04
Post 4 of 6
Replying to [OnTheGo]:Thanks for your suggestion, yes, it's not cheap for a inspection through the third party
26 Aug 2007 18:16
Post 5 of 6
Replying to [Catalyst]:Glad to see so much improtant information from you. yes, you are absolutely right, it depends on bank and many other aspects. Anyway, we need to be careful
26 Aug 2007 18:28
Post 6 of 6
Replying to [CathyLiu]:![[em12]](http://img.alibaba.com/images/eng/style/icon/emoticons_surprised.gif)
l.c. still could surprise you.
we have the experience of out of country l.c.`s even though it goes through our bank in canada it still could mean trouble not our bank but the out of country bank, but better no deal than no mopney.
l.c. still could surprise you.
we have the experience of out of country l.c.`s even though it goes through our bank in canada it still could mean trouble not our bank but the out of country bank, but better no deal than no mopney.
10 Sep 2007 06:15
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