Quoting from [GORZAK]:

Quoting from [Catalyst]:

Quoting from [Pramukh Trading]:




Dear Sir,





thanks for this your tips.





I want to ask one more thing, i have one deal is going with hongkong customer who want to buy some good from me. he only ready in 100% lc from hongkong.




this product which i will buy from one of the manufacturer and he will give me 30 days credit.and i am affraid that what if they will not clear the good from port ? what i cant get money from bank as per lc ?




so can you suggest me what i have to reply to him so i can get secure lc.




and also what i have to ask for lc related point that i can be sure for get money ?




Waiting for your reply.




Regards,




Vishal




pramukht@gmail.com


www.pramukhtrading.in

Sorry to be so late in responding.

If you submit documents exactly as per the LC terms, there is no reason why the documents will not be negotiated by the nominated bank (you might require a bill discounting limit with that bank - it could be your bank too), or for the issuing bank to pay.

The actual buyer (the applicant) has nothing to do as far as payment against an LC is concerned.

Dear Vishal

I am new in this site; and found it very interesting.


I think we all should cooperate to make international trade more simple and safe to everybody.

I am not sure to understand your question; so please let me know if this is correct:

Hong Kong customer want to buy some product from you; and he will pay through a L/C.


You will buy this same product from a local manufacturer, who will give you 30 days credit.


Your concern is what happen if your Hong Kong buyer do not clear the goods from the port...

If this is the case; then you dont have to worry.

You just have to make sure that L/C is irrevocable, 100% payable at sight, against first presentation of clean (on board - if by ship) shipping documents to the advising bank (your bank).

For more safety and quick payment purposes, you may also ask your Hong Kong buyer to make (issue) CONFIRMED L/C.

Then, you have to carefully (VERY CAREFULLY) check (previous to shipment) that documents required by L/C are those that you have negotiated with your Hong Kong buyer; and that you will be able to get after shipment.

If you take this simple steps, then you will not have problems to collect your mony against shipment.

Good luck!!

GORZAK

Quoting from [plugnkey]:

Quoting from [GORZAK]:

Quoting from [Catalyst]:

Quoting from [Pramukh Trading]:





Dear Sir,






thanks for this your tips.






I want to ask one more thing, i have one deal is going with hongkong customer who want to buy some good from me. he only ready in 100% lc from hongkong.





this product which i will buy from one of the manufacturer and he will give me 30 days credit.and i am affraid that what if they will not clear the good from port ? what i cant get money from bank as per lc ?





so can you suggest me what i have to reply to him so i can get secure lc.





and also what i have to ask for lc related point that i can be sure for get money ?





Waiting for your reply.





Regards,





Vishal





pramukht@gmail.com



www.pramukhtrading.in

Sorry to be so late in responding.

If you submit documents exactly as per the LC terms, there is no reason why the documents will not be negotiated by the nominated bank (you might require a bill discounting limit with that bank - it could be your bank too), or for the issuing bank to pay.

The actual buyer (the applicant) has nothing to do as far as payment against an LC is concerned.

Dear Sir,

Please clear one point can any buyer refuse for payment after issueing LC. (If all the term and condition of LC covered by seller) ?????

The LC is issued by the issuing bank. The Issuing bank is thus bound by its terms, to pay if the documents are in order. Strictly speaking, the buyer/applicant  has no role to play, has no power or influence over the issuing bank's decision to pay IF the documents comply, and all terms and conditions have been complied with by the seller.

Hope this helps.

Quoting from [Oneuni]:

Quoting from [Catalyst]:

Quoting from [Oneuni]:

Quoting from [Catalyst]:




Responding to Ranger: An 'exporter's BG' is also issued by a bank (being a bank guarantee, i.e.  BG) - his bank. The BG serves to protect the applicant (and his bank) against the possible failure of the exporter/beneficiary to eventually submit documents under the LC (from where the 'advance' is set off and reduced).


Essentially, as pointed out in my article, the BG (unlike an LC) is a second line of defence. It comes into play IF the beneficiary fails to perform. In contrast, in LC operations, the first claim (and obligation) is against the LC issuing bank, not the party/beneficiary/applicant (as the case may be).

      May I say in other way ?


      Both are "give guaranty to pay",


      but  L.C is a must pay and BG is  If only .buyer not pay us.


      thank You.

It would be a too simple definition, and not exactly correct either. Pl read my explanation once again. A guarantee and a direct undertaking/commitment are not the same. In an LC operation, though he is the actual buyer, the poor chap has absolutely no role to play. That is the beauty of an LC.   

      Carmelion /Camillon :  a  beauty  LZ = Lizard , mimicry and disguising in  phrase ...

The above is very interesting and factual. I would simply like to add that there appears to be a lot of confusion among members about the BG as a payment instrument. A Standby L/C or Bank Guarantee is NOT a principal payment instrument...it is a standby in the event that some event does/does not take place. On that basis, I would hope that many of the "deals" offered on the site will STOP asking for Bank Guarantees as the prime payment instrument in a transaction. It is NOT a payment instrument..just a guarantee. Prime payment instruments are T/T, Documentary collections and Letters of Credit. Standby's and guarantees merely act to make other parts of a transaction more secure.So collectively, can traders no longer say things like "payment by BG/SBLC"! These are NOT prime payment instruments

 

 

Quoting from [CPA Int]:

Quoting from [Oneuni]:

Quoting from [Catalyst]:

Quoting from [Oneuni]:

Quoting from [Catalyst]:





Responding to Ranger: An 'exporter's BG' is also issued by a bank (being a bank guarantee, i.e.  BG) - his bank. The BG serves to protect the applicant (and his bank) against the possible failure of the exporter/beneficiary to eventually submit documents under the LC (from where the 'advance' is set off and reduced).



Essentially, as pointed out in my article, the BG (unlike an LC) is a second line of defence. It comes into play IF the beneficiary fails to perform. In contrast, in LC operations, the first claim (and obligation) is against the LC issuing bank, not the party/beneficiary/applicant (as the case may be).

      May I say in other way ?



      Both are "give guaranty to pay",



      but  L.C is a must pay and BG is  If only .buyer not pay us.



      thank You.

It would be a too simple definition, and not exactly correct either. Pl read my explanation once again. A guarantee and a direct undertaking/commitment are not the same. In an LC operation, though he is the actual buyer, the poor chap has absolutely no role to play. That is the beauty of an LC.   

      Carmelion /Camillon :  a  beauty  LZ = Lizard , mimicry and disguising in  phrase ...

The above is very interesting and factual. I would simply like to add that there appears to be a lot of confusion among members about the BG as a payment instrument. A Standby L/C or Bank Guarantee is NOT a principal payment instrument...it is a standby in the event that some event does/does not take place. On that basis, I would hope that many of the "deals" offered on the site will STOP asking for Bank Guarantees as the prime payment instrument in a transaction. It is NOT a payment instrument..just a guarantee. Prime payment instruments are T/T, Documentary collections and Letters of Credit. Standby's and guarantees merely act to make other parts of a transaction more secure.So collectively, can traders no longer say things like "payment by BG/SBLC"! These are NOT prime payment instruments

The traders may not be technically perfect all the time, but (loosely speaking) 'payment by BG/SBLC' would not be off the mark either - IF both the parties know and understand what they are getting in to, what the exact arrangement IS.

While on the subject, I may add that in certain isntances a BG/SBLC has its advantages (over an LC). Remember that every LC (other than a revolving LC) expires with its use. These are essentailly one-time-use instruments.

Where the transaction is repetitive, and the parties know each other well, they may not wish to get a fresh LC for every transaction, go thru the hassels, even for documentation and bank scrutiny, or pay charges every time. There, a BG/SBLC for an extended period acts as an insurance or a safety net. IF there is a failure to pay, the BG/SBLC will kick in.

Quoting from [Catalyst]:

Quoting from [CPA Int]:

Quoting from [Oneuni]:

Quoting from [Catalyst]:

Quoting from [Oneuni]:

Quoting from [Catalyst]:






Responding to Ranger: An 'exporter's BG' is also issued by a bank (being a bank guarantee, i.e.  BG) - his bank. The BG serves to protect the applicant (and his bank) against the possible failure of the exporter/beneficiary to eventually submit documents under the LC (from where the 'advance' is set off and reduced).




Essentially, as pointed out in my article, the BG (unlike an LC) is a second line of defence. It comes into play IF the beneficiary fails to perform. In contrast, in LC operations, the first claim (and obligation) is against the LC issuing bank, not the party/beneficiary/applicant (as the case may be).

      May I say in other way ?




      Both are "give guaranty to pay",




      but  L.C is a must pay and BG is  If only .buyer not pay us.




      thank You.

Hello there,

I just would like add that even L/C can be tricked out, and can inflict harm to both parties.

Once I had a customer who happened to just make sure that the L/C issued had a little flaw just some letter mistake, which delayed the payment for over 30 days, and eventually he managed to cancel the payment.

What I didn't know back then was that even L/C has a escape clause for the buyer, limited to certain period, and under certain conditions.

even a L/C on sight can be stopped if the a supposed red flag goes off, that has been done on purpose.

On the buyers side the L/C can cause tremdouse harm, since if the Supplier is a trickster and knows how to fool the bank, since they actually will never see the goods only the papers, who knows what the container really contains, since every inspection guy can be bribed, tricked or illuded. So know of enough guys who got burnt that way, and so did I almost as well, I was just lucky I knew the bank Manager personally who helped to install another clause, that prevented that from happening, that stated that only personal inspection will be effective only.

As for the Bank gurantee I rather take that up on anytime, since in a way it has a T/T basis, but only good if I know the buyer for a while, also safes a lot on additonal cost like the L/C does, and is not as time consuming as the L/C.

But I have to say the best term is T/T on personal inspection and visit, no headaches no hassle.

Just tried to reflect some personal experiences.

peace people

In need of assistance

 

CONTACT ME FOR THIS MY PRIVET BOX DONALD_HOTA@CANTV.NET


With Regards,

Mr.Donald Hota

thanks for the info but how do we get assured of banks and real transfer rates

thanks

D-element Raw wrote:

thanks for the info but how do we get assured of banks and real transfer rates


thanks

There is no single solution for all situations, there is no situation "where one size fits all". If that was so, there would not have been so many instruments of payment/trade, nor so many variations in (for examples) the types of LCs themselves.

LCs, bank guarantees etc. are all tools (instruments) for use by the likes of us in international and domestic trade. They cannot  perform miracles on its own for the user. Like all tools, LCs/BGs are as good as only the person who uses them. Knowledge of these tools is important and necessary.

Dear Catalyst!

I have a question regarding usance L/C.What if a buyer opens, L/C 90 days from B/L date, and after shipment exporters submit the documents in compliance with the L/C terms.After that buyers clears the goods and receive the same without any problem.Let's say that this whole period takes 30 days time.But exporter has to wait another 60 days to receive the payment from the issuing bank since the L/C usance period was 90 days in this case.Now there are a few questions:

1.What if the buyer goes bankrupt after 30 days? Will exporter still get the payment in full after 90 days from the issuing bank?(Is it only issuing banks responsibilty to honor the L/C no matter what happens to buyer financially?)
2.What if the bank goes bankrupt itself? Will exporter get the payment?
3.What if the exporter wants to shorten the usance period.Let's say make it 60 days or 30 days,is it possible?If yes how?

Thank you very much in advance for your advice.
Regards
Javed Ali

Answer to your questions:

1.What if the buyer goes bankrupt after 30 days? Will exporter still get the payment in full after 90 days from the issuing bank?

It is only issuing banks responsibilty to honor the L/C no matter what happens to buyer financially. The LC is a commitment from the issuing bank, NOT from the buyer.


2.What if the bank goes bankrupt itself? Will exporter get the payment?

Not from the issuing bank. The buyer can still pay direct to the exporter. Else, the seller would have to que up with the others or go to court against the buyer.

3.What if the exporter wants to shorten the usance period.Let's say make it 60 days or 30 days,is it possible?If yes how?

Request the buyer to arrange for an amendment to the LC.