Re: Letters of credit
Letters of credit [Article]
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This is a comment to the article. Please click the link to view the original article.
Post 1 of 11
I purchased some products from China and for that I opened an L/C with some terms and conditions. After the products arrived in my country's port and were inspected, they were shipped to my warehouse. There I discovered that some of terms of the L/C were not met. What can do?
Best Regards,
Abu Mishaal
Best Regards,
Abu Mishaal
Letters of credit [Article]
This is a comment to the article. Please click the link to view the original article.
This is a comment to the article. Please click the link to view the original article.
02 Mar 2006 01:35
Post 2 of 11
Some sale/purchase contracts include the the eqest for a "fully funded" L/C. Such term is often used by middlemen or exporters not familiar with L/C definitions. There is no definition of a "fully funded" L/C. It is a confusing term without meaning. A Buyer should be alert if a Seller ask for Fully Funded L/C because the banks do not know what it is.
15 Feb 2006 23:26
Post 3 of 11
HI , I am a first timer importer . Just would like to know if LC's is
the safest method of payment .
What recourse do I have if I get ripped off .
the safest method of payment .
What recourse do I have if I get ripped off .
09 Mar 2006 06:13
Post 4 of 11
Replying to [Joey]:L/C is probably the safest way for you to go, but I would inspect or have someone(like a hellmans) inspect the items before release of payment.IMO
09 Mar 2006 18:51
Post 5 of 11
Replying to [Joey]:
L/C at Sight is probably the most commonly used and accepted payment terms in the trading world.
If you're asking about safety, the answer is ; it depends on the terms of safety you define.
L/C will guarantee that you will only pay once the shipment is executed BUT L/C will NOT guarantee that you will get the correct goods/consignment.
There is a likelihood (happens many times) that Buyer get a garbage inside the container.You have to understand the process of L/C (under UCP 500) to realize that that case is really possible to occur.
So I kind of disagree with rct60 dude answer above, because there is no way you can inspect the goods before releasing the payment.
Under L/C, everything depends on the documents it requires.Once all documents are deemed "clean", payment will automatically flow to the Sellers.There is no If and But here.
How to prevent from getting screwed (receiving garbage) ? There is only one thing; always ask for pre-shipment inspection (by third paty, SGS for example) and put it as one of the document requirement in L/C
L/C at Sight is probably the most commonly used and accepted payment terms in the trading world.
If you're asking about safety, the answer is ; it depends on the terms of safety you define.
L/C will guarantee that you will only pay once the shipment is executed BUT L/C will NOT guarantee that you will get the correct goods/consignment.
There is a likelihood (happens many times) that Buyer get a garbage inside the container.You have to understand the process of L/C (under UCP 500) to realize that that case is really possible to occur.
So I kind of disagree with rct60 dude answer above, because there is no way you can inspect the goods before releasing the payment.
Under L/C, everything depends on the documents it requires.Once all documents are deemed "clean", payment will automatically flow to the Sellers.There is no If and But here.
How to prevent from getting screwed (receiving garbage) ? There is only one thing; always ask for pre-shipment inspection (by third paty, SGS for example) and put it as one of the document requirement in L/C
09 Mar 2006 19:46
Post 6 of 11
Replying to [trado]:
I think you are wrong, because if you use L/C you wont get a container full of trash unless its coming from africa. I just finished buying another 40ft hq container of tires and ive been informed by my bank every single thing i bought is inside of it, so now that everything is in order, L/C can be payable.
If thats not secure, what is secure then for you?
I think you are wrong, because if you use L/C you wont get a container full of trash unless its coming from africa. I just finished buying another 40ft hq container of tires and ive been informed by my bank every single thing i bought is inside of it, so now that everything is in order, L/C can be payable.
If thats not secure, what is secure then for you?
10 Mar 2006 06:15
Post 7 of 11
Replying to [blacke]:
You can get trash from all over the world, not only from africa.
Because cheater exist worldwide.
If your seller wants to screw you, they can do that regardless where they are.
I think your statement is quite misleading because as far as the L/C is concerned, banks normally will only handle the documents and not the real goods itself.
I do not think any bank in this world will come to inspect the arriving goods no matter how close your relationship with your bank.
They will base all their judgment based on documents only.
To answer your question; the only safest method is using L/C at Sight with
SGS pre-shipment inspection
You can get trash from all over the world, not only from africa.
Because cheater exist worldwide.
If your seller wants to screw you, they can do that regardless where they are.
I think your statement is quite misleading because as far as the L/C is concerned, banks normally will only handle the documents and not the real goods itself.
I do not think any bank in this world will come to inspect the arriving goods no matter how close your relationship with your bank.
They will base all their judgment based on documents only.
To answer your question; the only safest method is using L/C at Sight with
SGS pre-shipment inspection
12 Mar 2006 20:50
Post 8 of 11
Replying to [trado]:I live near a shipping port, with L/C payment at site, would I be able to inspect the goods before the exporter will get my money?
17 Mar 2006 10:45
Post 9 of 11
Replying to [Archi]:
It does not matter where you live.To check the goods, you must obtain the important docs such as B/L, Invoice, and PAcking List.And the only way you can get these docs (if payment under L/C at Sight) is from your bank AFTER your bank has remitted the money to your Seller's bank.
Once the money is out, I believe there is very little that can be done to prevent anything.
So I think, you must engage SGS service to do pre-shipment inspection just to be on the safe side
It does not matter where you live.To check the goods, you must obtain the important docs such as B/L, Invoice, and PAcking List.And the only way you can get these docs (if payment under L/C at Sight) is from your bank AFTER your bank has remitted the money to your Seller's bank.
Once the money is out, I believe there is very little that can be done to prevent anything.
So I think, you must engage SGS service to do pre-shipment inspection just to be on the safe side
19 Mar 2006 19:26
Post 10 of 11
Replying to [trado]:So basically the so call "important" docs such as B/L, invoice and packing is only useful to get the shipment and inspect AFTER the payment is already made. it is as important as it can be after all. :)
Can you tell me what B/L stand for?
What about SGS? Who can do it?
Can you tell me what B/L stand for?
What about SGS? Who can do it?
17 May 2006 05:00
Post 11 of 11
Replying to [Wako]:
Yeah, you put it quite right.B/L and the other so called" shipping documents" can only guarantee that shipment is made (although in some extreme cases, fraudster could also produce fake B/L, etc).
There is no guarantee whatsoever that seller ship the correct (agreed as per the contract) goods.
B/L stands for Bill of Lading a document which is issued by shipping lines (or forwarder) and certify that shipment is made using their (shipping lines)vessel.Always request for master B/L (B/L which is issued by shipping lines not forwarder).
SGS is the survey and inspection company, quite a big one.their website is www.sgs.com, you can find more about them there.Most likely, in the website you will find their branch office detail in your country
Yeah, you put it quite right.B/L and the other so called" shipping documents" can only guarantee that shipment is made (although in some extreme cases, fraudster could also produce fake B/L, etc).
There is no guarantee whatsoever that seller ship the correct (agreed as per the contract) goods.
B/L stands for Bill of Lading a document which is issued by shipping lines (or forwarder) and certify that shipment is made using their (shipping lines)vessel.Always request for master B/L (B/L which is issued by shipping lines not forwarder).
SGS is the survey and inspection company, quite a big one.their website is www.sgs.com, you can find more about them there.Most likely, in the website you will find their branch office detail in your country
17 May 2006 19:54
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