I need urgent help regarding LC
Post 1 of 11
I want to import scrap in large scale and have received a contract and i am to sign it and send back but in payment terms they have mentioned that ""Buyer shall open an irrevocable LC payable 100% at sight.The LC shall allow for T/T REIMBURSEMENT ".
Please help me as i don't know what is T/T REIMBURSEMENT.
We want to pay the money only by 100% LC.
Plese help me
Thanks in advance
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04 Jul 2007 12:43
Post 2 of 11
Replying to [hadi58]:
T/T Reimbursement is the abbreviation of Telegraphic transfer reimbursement, this is the way states that how the Exporter's bank (EB) claims the payment. TT is the method of communication by telegraphic between banks (i.e SWIFT message, telex)
As usual, after receiving documents (docs) from the exporter, EB sends documents to the Importer's bank (IB) to claim the payment. If docs comply with the terms and conditions of L/C, the IB will honor (pay) that payment within 7 days after date receiving of docs.
If L/C states TT reimbursement allowed, the EB will send docs to IB and simultaneously will claim payment by T/T. Because this claim is made and transfered by telegraphic, it very fast, so the exporter may get their payment faster than usual.
In my opnion, there is no problem in this type of payment.
Regards.
T/T Reimbursement is the abbreviation of Telegraphic transfer reimbursement, this is the way states that how the Exporter's bank (EB) claims the payment. TT is the method of communication by telegraphic between banks (i.e SWIFT message, telex)
As usual, after receiving documents (docs) from the exporter, EB sends documents to the Importer's bank (IB) to claim the payment. If docs comply with the terms and conditions of L/C, the IB will honor (pay) that payment within 7 days after date receiving of docs.
If L/C states TT reimbursement allowed, the EB will send docs to IB and simultaneously will claim payment by T/T. Because this claim is made and transfered by telegraphic, it very fast, so the exporter may get their payment faster than usual.
In my opnion, there is no problem in this type of payment.
Regards.
04 Jul 2007 20:17
Post 3 of 11
Replying to [hadi58]:
It seems that this requirement of the seller is not quite clear.
Ask them to clarify on this. On the other hand, you may also ask for opinion from your bank.
It seems that this requirement of the seller is not quite clear.
Ask them to clarify on this. On the other hand, you may also ask for opinion from your bank.
04 Jul 2007 20:59
Post 4 of 11
Replying to [hadi58]:TT reimbursement is meant for bank to bank reimbursement. It has nothing to do with either buyer or seller. However, that requirement will be subject to approval by issuing bank. There are another method of bank to bank reimbursements, by drawing a sight draft on the confirming bank or the issuing bank and by providing instruction by the negotiating bank on how to dispose of the proceeds to the negotiating bank.
This method of reimbursement will be indicated by the bank. You may bring this up to your bank (issuing bank).
05 Jul 2007 02:40
Post 5 of 11
Replying to [hadi58]:
There is a pro and con of using 100% irrevocable L/C at sight. The good thing is that the seller have to send you something according to to condition specified in the L/C with all the documents correctly. If there are any discrepancy in the documents and the buyer can accept it then the seller have to bare a USD50 charge for the discrepancy.
On the other hand it is just the documents that your bank is looking for not the quality of the goods, for example if you are buying 500MT of scrap stainless steel and the seller send you 500MT of steel you still have to pay, then you have to file for a claim later and your bank will be a mediator between the buyer and seller. This is what my bank told me, I guess this is going to be very messy claim. I have no experience in this issue, anyone who have encounter this please share your experience.
My advise if the transaction is big you should take a look at the goods and have a comment understanding with your seller before issuing the L/C as by using L/C there is no gaureentee on the quality of the goods.
Rgds, David
There is a pro and con of using 100% irrevocable L/C at sight. The good thing is that the seller have to send you something according to to condition specified in the L/C with all the documents correctly. If there are any discrepancy in the documents and the buyer can accept it then the seller have to bare a USD50 charge for the discrepancy.
On the other hand it is just the documents that your bank is looking for not the quality of the goods, for example if you are buying 500MT of scrap stainless steel and the seller send you 500MT of steel you still have to pay, then you have to file for a claim later and your bank will be a mediator between the buyer and seller. This is what my bank told me, I guess this is going to be very messy claim. I have no experience in this issue, anyone who have encounter this please share your experience.
My advise if the transaction is big you should take a look at the goods and have a comment understanding with your seller before issuing the L/C as by using L/C there is no gaureentee on the quality of the goods.
Rgds, David
05 Jul 2007 20:09
Post 6 of 11
Replying to [hadi58]: You can send a TT & open the L\C with that much less amount. Its not a big thing.
07 Jul 2007 11:54
Post 7 of 11
Replying to [hadi58]:
This kind of payment is nothing effection on you and your customer,so you need to do the detailed document every step planned!
This kind of payment is nothing effection on you and your customer,so you need to do the detailed document every step planned!
08 Jul 2007 03:59
Post 8 of 11
pls check ur open bank what the mean is and the bank will advice u also .
08 Jul 2007 20:30
Post 9 of 11
Replying to [hadi58]:
Hello,I see your meening,But If you Pay for your supplier 100% LC,the supplier can't buy material and product the articles you need.
even though he /she can afford the advance ,she /he will not do this.Because they are afraid that you don't pay for them when they have producted your articles.
Hope you know their trouble.
Hello,I see your meening,But If you Pay for your supplier 100% LC,the supplier can't buy material and product the articles you need.
even though he /she can afford the advance ,she /he will not do this.Because they are afraid that you don't pay for them when they have producted your articles.
Hope you know their trouble.
09 Jul 2007 03:55
Post 10 of 11
Replying to [hadi58]:Hi,our company has lost huge money due to advanced payment and that is why we are not going to pay anybody before we get the commodity.Secondly we are scrap dealers and the supplier dosen't need to produce the commodity they will just send us scrap from their yards.
10 Jul 2007 02:27
Post 11 of 11
Replying to [hadi58]: T/Tmeans TELEGRAPHIC TRANSFER!
June
MORIEL FINANCE
June
MORIEL FINANCE
15 Jul 2007 23:49
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