How long will you open L/C to your supplier ?
Post 1 of 22
We have a made a deal with a customer.
and the payment terms are L/C AT SIGHT.
the order have been confirmed more than 2 months.
as they told us that they will opening L/C to us.
but we didn't hearing any news about them untill now.
he told us that he is preparing the L/C .but even now we didin't see any news about the copy of L/C.
so is it anyone buyers can told us that how long will you opening a L/C to your suppliers? is it need to taking such a long time ?
what should we asking with our customer ?
thanks for any advice !
and the payment terms are L/C AT SIGHT.
the order have been confirmed more than 2 months.
as they told us that they will opening L/C to us.
but we didn't hearing any news about them untill now.
he told us that he is preparing the L/C .but even now we didin't see any news about the copy of L/C.
so is it anyone buyers can told us that how long will you opening a L/C to your suppliers? is it need to taking such a long time ?
what should we asking with our customer ?
thanks for any advice !
22 Oct 2007 01:56
Post 2 of 22
Replying To [Stella Weng]:Hi Stella.
I would ask the customer why it is taking so long to open the LC.
Tell him you need the LC opened before you can start production.
That's what I tell my customers.
Open the LC, and once my bank has received it, production will commence.
Otherwise you will have goods and no LC.
22 Oct 2007 03:29
Post 3 of 22
Replying to [Stella Weng]:
our turkey buyer opens l/c and takes no longer time than yours buyer.
our turkey buyer opens l/c and takes no longer time than yours buyer.
22 Oct 2007 23:30
Post 4 of 22
Replying to [grigo]:
Thanks grigo.
yes.we have asked him this questions. he said that we are still preparing the papper work to the bank. But I don't known what's the documents are they should be applicate to the bank.
Is it so complicated ?
this is what i want to known?
Thanks grigo.
yes.we have asked him this questions. he said that we are still preparing the papper work to the bank. But I don't known what's the documents are they should be applicate to the bank.
Is it so complicated ?
this is what i want to known?
23 Oct 2007 00:17
Post 5 of 22
Replying to [Stella Weng]:
Yes, it COULD be complicated. Probable reasons: (1) They could be applying for LCs for the first time; (2) They may not have any LC facility in place that is already sanctioned by the bank- you are aware that they must have a line of credit if the bank is to entertain their application, (3) Their bank may not be agreeable to open LC for a new client, or against 100% cash margin; OR (4) They may not be willing or ready to open the LC yet, just stalling till they find a better/cheaper deal.
Yes, it COULD be complicated. Probable reasons: (1) They could be applying for LCs for the first time; (2) They may not have any LC facility in place that is already sanctioned by the bank- you are aware that they must have a line of credit if the bank is to entertain their application, (3) Their bank may not be agreeable to open LC for a new client, or against 100% cash margin; OR (4) They may not be willing or ready to open the LC yet, just stalling till they find a better/cheaper deal.
24 Oct 2007 01:47
Post 6 of 22
Replying to [Stella Weng]:
[1] If the buyer is clear about what amount of goods at what price and from which buyer, which country he wants to buy it should not take more than 7 working days to open the L/C.........
[2] There could be couple of revision might take place in L/C draft either from buyers or L/C issuing bankers end but 7 working days are sufficient time to make the final draft............
[3] Normally whenever buyer intend to open the L/C he has to pay that amount upfront to his bank then only bank opens the L/C. .....
[4] If the buyer is having very good volume of business with the bank they open the L/C without having the upfront money.....
[5] In your case you need to inform the buyer that without having the L/C copy you will not start the manufacturing process.....
[6] To produce the goods it will take so many days (e.g. 45 days) so the L/C validity has to be 60 days from the date of L/C opening....
[7] NEVER EVER START THE PRODUCTION JUST BECAUSE BUYER SAYS SO....
[8] Once you receive the L/C contact your bankers. Confirm the authenticity of the L/C, then only start the production....
[9] Whenever you will find that you can not export the goods within the stipulated time (e.g. 60 days from the date of L/C opening) inform the buyer and ask him to revise the period in the L/C. Otherwise you will have to submit the documents in your bank with descripancy for which your banker may charge you USD 100 or the charges mentioned by the L/C issuing bank....
Hope I have clarfied your doubt.
[1] If the buyer is clear about what amount of goods at what price and from which buyer, which country he wants to buy it should not take more than 7 working days to open the L/C.........
[2] There could be couple of revision might take place in L/C draft either from buyers or L/C issuing bankers end but 7 working days are sufficient time to make the final draft............
[3] Normally whenever buyer intend to open the L/C he has to pay that amount upfront to his bank then only bank opens the L/C. .....
[4] If the buyer is having very good volume of business with the bank they open the L/C without having the upfront money.....
[5] In your case you need to inform the buyer that without having the L/C copy you will not start the manufacturing process.....
[6] To produce the goods it will take so many days (e.g. 45 days) so the L/C validity has to be 60 days from the date of L/C opening....
[7] NEVER EVER START THE PRODUCTION JUST BECAUSE BUYER SAYS SO....
[8] Once you receive the L/C contact your bankers. Confirm the authenticity of the L/C, then only start the production....
[9] Whenever you will find that you can not export the goods within the stipulated time (e.g. 60 days from the date of L/C opening) inform the buyer and ask him to revise the period in the L/C. Otherwise you will have to submit the documents in your bank with descripancy for which your banker may charge you USD 100 or the charges mentioned by the L/C issuing bank....
Hope I have clarfied your doubt.
24 Oct 2007 06:42
Post 7 of 22
Replying to [Smir]:Thank you for your sharing Samir and grigo , I have resoulved some of my questions from your sharing , THANKYOU VERY MUCH.
24 Oct 2007 06:55
Post 8 of 22
Replying to [Stella Weng]:
we're buyers of big volume quantities in ladies garments,
we issue L/C to our suppliers but some delay us for 1 or 2 months until they start to produce. Is there any serious suppliers willing to take immediate orders with L/C?
we're buyers of big volume quantities in ladies garments,
we issue L/C to our suppliers but some delay us for 1 or 2 months until they start to produce. Is there any serious suppliers willing to take immediate orders with L/C?
25 Oct 2007 15:22
Post 9 of 22
Replying to [Smir]:
Thanks Smair.
Now we can learn more from your answer.
thank you for sharing with this progress.
Thanks Smair.
Now we can learn more from your answer.
thank you for sharing with this progress.
28 Oct 2007 19:39
Post 10 of 22
Replying to [Karene]:
Usually when the business transaction of payments are payin by L/C . you can thinking that for the totally time of produciton will be taking almost 60days.
including the cargos are arriving at the warehouse.
it will taking too much time to getting the goods for the buyer.
so better you should talking with the suppliers for the better time.
anything can be negotiated with each side.
Usually when the business transaction of payments are payin by L/C . you can thinking that for the totally time of produciton will be taking almost 60days.
including the cargos are arriving at the warehouse.
it will taking too much time to getting the goods for the buyer.
so better you should talking with the suppliers for the better time.
anything can be negotiated with each side.
28 Oct 2007 19:48
Post 11 of 22
Replying to [Smir]:
Just one small correction to an otherwise good suggestions. You said "[8] Once you receive the L/C contact your bankers. Confirm the authenticity of the L/C, then only start the production...."
I quote UCP, Article 9:
"a. By advising the credit or amendment, the advising bank signifies that it has satisfied itself as to the apparent authenticity of the credit or amendment and that the advice accurately reflects the terms and conditions of the credit or amendment received.
b. An advising bank may utilize the services of another bank (“second advising bank”) to advise the credit and any amendment to the beneficiary. By advising the credit or amendment, the second advising bank signifies that it has satisfied itself as to the apparent authenticity of the advice it has received and that the advice accurately reflects the terms and conditions of the credit or amendment received."
Thus, when a bank advises a credit, it is its duty to verify its authenticity. If it cannot???? See sub-article 'f' of the same article of the UCP:
"f. If a bank is requested to advise a credit or amendment but cannot satisfy itself as to the apparent authenticity of the credit, the amendment or the advice, it must so inform, without delay, the bank from which the instructions appear to have been received. If the advising bank or second advising bank elects nonetheless to advise the credit and any amendment, it must inform the beneficiary or second advising bank that it has not been able to establish the apparent authenticity of the credit, the amendment or the advice. "
The above is the correct position.
Just one small correction to an otherwise good suggestions. You said "[8] Once you receive the L/C contact your bankers. Confirm the authenticity of the L/C, then only start the production...."
I quote UCP, Article 9:
"a. By advising the credit or amendment, the advising bank signifies that it has satisfied itself as to the apparent authenticity of the credit or amendment and that the advice accurately reflects the terms and conditions of the credit or amendment received.
b. An advising bank may utilize the services of another bank (“second advising bank”) to advise the credit and any amendment to the beneficiary. By advising the credit or amendment, the second advising bank signifies that it has satisfied itself as to the apparent authenticity of the advice it has received and that the advice accurately reflects the terms and conditions of the credit or amendment received."
Thus, when a bank advises a credit, it is its duty to verify its authenticity. If it cannot???? See sub-article 'f' of the same article of the UCP:
"f. If a bank is requested to advise a credit or amendment but cannot satisfy itself as to the apparent authenticity of the credit, the amendment or the advice, it must so inform, without delay, the bank from which the instructions appear to have been received. If the advising bank or second advising bank elects nonetheless to advise the credit and any amendment, it must inform the beneficiary or second advising bank that it has not been able to establish the apparent authenticity of the credit, the amendment or the advice. "
The above is the correct position.
29 Oct 2007 20:23