L/C and required documents when importing scrap metals (car batteries)
Post 1 of 7
Dear All,
I am new to International Trade and arranging Letters of Credit (previous business deals were either local or with overseas partners found on the basis of strong personal recommendations).
I am now trying to arrange the purchase (import) of scrap car batteries from overseas and I'm exploring the most secure and fair manner of arranging payment.
Since the quality of these scrap metals (including composition, level of corrosion, ratio of plastic/non-metalic vs lead components) is important in the determination of their price, I was wondering what is the right way to structure a L/C and what documents to base it on.
From this forum and other resources, I understand that the L/C are abstract from facts and purely based on documents; I also belive the Bill of Landing, and Customs documents are the most common docs on which they are based.
However, does either of these documents contain details about the goods? I mean, will a Bill of Landing or a Customs Certificate give the assay (chemical composition) or at least the split of metalic vs non-metalic components?
If this is not the case, how to structure a L/C so that it is not redeemable by the beneficiary until the delivery of goods with quality as described in the Sale Contract?
Many thanks for your guidance, and apologies about the basic nature of this query!
Rgds,
Igor
I am new to International Trade and arranging Letters of Credit (previous business deals were either local or with overseas partners found on the basis of strong personal recommendations).
I am now trying to arrange the purchase (import) of scrap car batteries from overseas and I'm exploring the most secure and fair manner of arranging payment.
Since the quality of these scrap metals (including composition, level of corrosion, ratio of plastic/non-metalic vs lead components) is important in the determination of their price, I was wondering what is the right way to structure a L/C and what documents to base it on.
From this forum and other resources, I understand that the L/C are abstract from facts and purely based on documents; I also belive the Bill of Landing, and Customs documents are the most common docs on which they are based.
However, does either of these documents contain details about the goods? I mean, will a Bill of Landing or a Customs Certificate give the assay (chemical composition) or at least the split of metalic vs non-metalic components?
If this is not the case, how to structure a L/C so that it is not redeemable by the beneficiary until the delivery of goods with quality as described in the Sale Contract?
Many thanks for your guidance, and apologies about the basic nature of this query!
Rgds,
Igor
31 Jan 2008 22:37
Post 2 of 7
Replying to [Toping]:In order to make sure that the goods has been past all necessary examination, you need to ask for an Inspection company at the supplier's country to check the goods prior to shipment. The inspection company will issue an Inspection Certificate signed and stamped, which you will ask to present to the bank with all other required documents.
03 Feb 2008 11:51
Post 3 of 7
Replying to [Toping]:
Buying of scrap, normally buyer go to site and inspect the goods and pay on site base on the estimated value.
It is very difficult to ask a third party to do the inspection or to have a clause in L/C, remember bank do not care about the goods they only care about the paper work, I other words if they ship you "cow dung" instead of scarp batteries, you still have to pay.
Buying of scrap, normally buyer go to site and inspect the goods and pay on site base on the estimated value.
It is very difficult to ask a third party to do the inspection or to have a clause in L/C, remember bank do not care about the goods they only care about the paper work, I other words if they ship you "cow dung" instead of scarp batteries, you still have to pay.
03 Feb 2008 22:41
Post 4 of 7
Replying to [David Frencken]:
Hi David,
Yes, that makes sense - I can imagine it's difficult to add a clause.
But surely there must be a way, since if you want to purchase from abroad, and buy goods worth $250,000 or so, you cannot take that much cash in the country?
Cheers,
IG
Hi David,
Yes, that makes sense - I can imagine it's difficult to add a clause.
But surely there must be a way, since if you want to purchase from abroad, and buy goods worth $250,000 or so, you cannot take that much cash in the country?
Cheers,
IG
04 Feb 2008 03:39
Post 5 of 7
Replying to [Toping]:
If the amount is that huge, it is a must to look at the goods first. Ask for their bank detail first, prepare all the documentation, leave the amount empty, arrange with your appointed forwarder to get ready the container and fly to see the goods.
Once agree on the final amount, call back to your office and ask them to submit the T/T and you can start loading. Once loading finish seal the container. Upon T/T through pull away.
The next dealing if you can trust them then you can deal in T/T certain percentage and upon receiving T/T the balance.
This is what my friend who is in the scrap business does. I hope it help and good luck
If the amount is that huge, it is a must to look at the goods first. Ask for their bank detail first, prepare all the documentation, leave the amount empty, arrange with your appointed forwarder to get ready the container and fly to see the goods.
Once agree on the final amount, call back to your office and ask them to submit the T/T and you can start loading. Once loading finish seal the container. Upon T/T through pull away.
The next dealing if you can trust them then you can deal in T/T certain percentage and upon receiving T/T the balance.
This is what my friend who is in the scrap business does. I hope it help and good luck
04 Feb 2008 20:53
Post 6 of 7
Replying to [David Frencken]:
Hi anyone in the scrap business who wants a partner or associate in China in the importation of scrap plastics into China?
Please let me know as I deal with importation of scrap plastics into Hong Kong and China.
EM
Hi anyone in the scrap business who wants a partner or associate in China in the importation of scrap plastics into China?
Please let me know as I deal with importation of scrap plastics into Hong Kong and China.
EM
05 Feb 2008 11:27
Post 7 of 7
Replying to [Toping]:
I agree with "Diligent".
What you need to do is select and ask a suitably qualified, experienced inspection agency of your choice to do the inspection on your behalf. Tell them clearly what they should look for, inspect and certify. These verifications and issue of certificate should be done before shipment. That certificate should be a part of the documents which should be submitted under the LC (along with other documents).
On your turn, you should also specify - as a clause in the LC - that one of the terms in the LC should inlcude a quality certificate. Do not forget to specify (in the LC) WHO should issue that certificate, and WHAT it should certify. Apart from the qualty specifications it can also certify the quantity etc. As the buyer, and the applicant, you are the boss, and have the right to specify in the LC exactly what you want, what the seller should comply with (under the LC).
These stipulations should take care of your worry about quality and quantity.
I agree with "Diligent".
What you need to do is select and ask a suitably qualified, experienced inspection agency of your choice to do the inspection on your behalf. Tell them clearly what they should look for, inspect and certify. These verifications and issue of certificate should be done before shipment. That certificate should be a part of the documents which should be submitted under the LC (along with other documents).
On your turn, you should also specify - as a clause in the LC - that one of the terms in the LC should inlcude a quality certificate. Do not forget to specify (in the LC) WHO should issue that certificate, and WHAT it should certify. Apart from the qualty specifications it can also certify the quantity etc. As the buyer, and the applicant, you are the boss, and have the right to specify in the LC exactly what you want, what the seller should comply with (under the LC).
These stipulations should take care of your worry about quality and quantity.
11 Feb 2008 19:27
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