Sir,
Please advice the possibility and documents to be taken care in the following shipment.
Shipment : Local - ( both the parties are in the same country)
Country of shipment and delivery: Same.
Payment terms : 30 % advance and Balance 70 % against LC .
Is it possible to draw an LC for the partial Local Purchase order and what are the documents to be taken care.
Self is the shipper.
Kindly advice.
Sam
LC against partial shipment.
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sam
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kadir
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Art. 2 Defination of The Credit
Dear Sam,
Letter of credit is a payment mechanism. You may issue an lc for both in local ol int'l trade.
Pls see art.2 of UCP 600 for the defination of Credit : Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation
.
If you issue an lc for partially, you should better indicate the advance payment amount in the credit which allows the commercial invoice to indicate advance payment.
Required documents are depend on both your consideration and the trade requirement, you may require commercial invoice, deliver order or anything else you need.
.
Best Regards
Kadir
Letter of credit is a payment mechanism. You may issue an lc for both in local ol int'l trade.
Pls see art.2 of UCP 600 for the defination of Credit : Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation
.
If you issue an lc for partially, you should better indicate the advance payment amount in the credit which allows the commercial invoice to indicate advance payment.
Required documents are depend on both your consideration and the trade requirement, you may require commercial invoice, deliver order or anything else you need.
.
Best Regards
Kadir
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Ahmedshawky
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a payment methd and export/import
hey sam
LCs in general is viewed as a payment method not only for exporting or importing but yet again its not only a payment method its a secured way of getting your payment as a benefeciary providing that you shipped delivered your goods and providing you prepared the valid shipping documents concerned
in your case a local LC is actualy a double edged weapon which means that even thou the documents required in such lcs are usual simple and much much more easier to prepare than export documents related to an LC many companies fail to recognize that the issuing of the LC is not the main core here actualy issuing an undangerouse LC where you hold on to your right to get paid after delivery of the concerned goods
dont ever forget the 4th clause in ISBP 600 clearly stating that (A credit should not require presentation of documents that are to be issued or countersigned by the applicant --if a credit is issued including such terms the benefeciary must seek amendment or ! comply with them and bear the risk of failure to do so )
so mainly the kind of documents that is secured in a local LC should be as follows
1- a commercial invoice issued by you as a benefeciary
2- a shpping note /reciept from the land shipping agency or a land way bill evidencing the shippment up to the premisses of the aplicant (if you carry the freight or shipping up to his premisses )
3-An inspection cerficate from a 3rd party evidencing that shipping in your premisses have been done according to the proforma or his order etc,,issued in the same date of loading at your premisses
Never put such documents as a delivery note signed by the applicants or a condition such as your invoice got to be signed by the applicants !
in practise that just proved to be an epic fail and turned most of the local LCs into some sort of a collection or documents under approval and to be short the Local LC then is considered a dangerouse LC where its hanging on the applicant good will and relation with you
so companies even now hire 3rd party inspectors to issue an inspection certificate upon loading to the applicants in local LCs and carries the extra cots gladely knowing that by that they are simply not putting there neck under the mercy of the goodwil or the good relation with the applicants of such lcs
Best of luck
Ashawki
LCs in general is viewed as a payment method not only for exporting or importing but yet again its not only a payment method its a secured way of getting your payment as a benefeciary providing that you shipped delivered your goods and providing you prepared the valid shipping documents concerned
in your case a local LC is actualy a double edged weapon which means that even thou the documents required in such lcs are usual simple and much much more easier to prepare than export documents related to an LC many companies fail to recognize that the issuing of the LC is not the main core here actualy issuing an undangerouse LC where you hold on to your right to get paid after delivery of the concerned goods
dont ever forget the 4th clause in ISBP 600 clearly stating that (A credit should not require presentation of documents that are to be issued or countersigned by the applicant --if a credit is issued including such terms the benefeciary must seek amendment or ! comply with them and bear the risk of failure to do so )
so mainly the kind of documents that is secured in a local LC should be as follows
1- a commercial invoice issued by you as a benefeciary
2- a shpping note /reciept from the land shipping agency or a land way bill evidencing the shippment up to the premisses of the aplicant (if you carry the freight or shipping up to his premisses )
3-An inspection cerficate from a 3rd party evidencing that shipping in your premisses have been done according to the proforma or his order etc,,issued in the same date of loading at your premisses
Never put such documents as a delivery note signed by the applicants or a condition such as your invoice got to be signed by the applicants !
in practise that just proved to be an epic fail and turned most of the local LCs into some sort of a collection or documents under approval and to be short the Local LC then is considered a dangerouse LC where its hanging on the applicant good will and relation with you
so companies even now hire 3rd party inspectors to issue an inspection certificate upon loading to the applicants in local LCs and carries the extra cots gladely knowing that by that they are simply not putting there neck under the mercy of the goodwil or the good relation with the applicants of such lcs
Best of luck
Ashawki