外贸英语函电实训四

外贸英语函电实训四

1. Warming up practice:

Ⅰ. Translate the following L/C stipulation into Chinese orally.

1）All draft(s) drawn under this credit must contain the clause “Drawn under

Bank of China, Tianjin credit No.2013 dated 19th October, 2003.”

2）Bill of Lading must be dated not before the date of this credit but later than

OCT. 15, 2003.

3）Port congestion surcharges, if any, at the time of shipment is for opener’s

account.

4） In reimbursement, please draw on our head office account with your New

York office.

5） We hereby engage with drawers and/or bona fide holders that draft(s)

drawn and negotiated on presentation and that draft(s) accepted within the terms

of this credit will be duly honored at maturity.

6） This credit is subject to the Uniform Customs and Practice for

Documentary credits-UCP(1993 Revision) International Chamber of Commerce

publication No. 500.

7） Beneficiaries’ declaration on invoice that the production company is a

state-owned enterprise and has no relation with Israel whatsoever.

8） Full set of at least three signed copies of clean “On Board” ocean bills of

lading showing beneficiary as shipper, made out to order of shipper and endorsed

to the order of London commercial bank marked with the documentary credit No.

Freight prepaid and notify buyers.

Ⅱ.Read more

Classification of Letter of Credit

Letters of credit may be classified into several kinds：

1．According to the attaching of documents

1）Clean credit

A clean credit is a credit against which the beneficiary of the credit may draw a

bill of exchange without presentation of documents. Payment will be effected only

against a daft without any shipping documents attached thereto or sometimes, against

a draft with an invoice alone attached thereto.

2）Documentary credit

A documentary credit is universally used as a method of payment in international

trade. It is a credit under which payment will be made against documents representing title to the goods and thus making the transfer of title possible.

2．According to the revocability of credit

A credit may be either revocable or irrevocable. Every credit should clearly

indicate whether it is revocable or irrevocable. In the absence of such indication the

credit shall be deemed to be irrevocable.

1）Revocable credit

A revocable credit is a credit which can be amended or cancelled at any moment

by the issuing bank without prior notice to the beneficiary. However, under such a

credit, if the payment, acceptance, or negotiation has been effected by the banks

concerned prior to their to their receipt of notice of amendment or cancellation, the

issuing bank will still have paid, negotiated, or accepted against documents presented

in compliance with the terms of a revocable documentary credit, such action remains

in force, provided it took place prior to that bank’s receipt of notice of amendment or

revocation. A revocable credit because it offers little security to the seller, therefore a

revocable credit is generally unacceptable and rarely used.

2）Irrevocable credit

An irrevocable credit is a credit which constitutes a definite undertaking of the

issuing bank and can be amended or cancelled by the issuing bank only on condition

that all parties concerned, that is , the issuing bank, the beneficiary and the confirming

bank, if any, do agree. This credit gives the beneficiary greater assurance of payment.

As a result, this type of credit is the most widely used in international trade.

3．According to the time of payment

1）Sight L/C

A letter of credit calling for the presentation of sight drafts is a sight credit, under

which the beneficiary is entitled to receive payment at once on presentation of his

draft to the drawee bank or to the issuing bank if drawn on the issuing bank, once the

relevant documents have been checked and found to be in order.

2）Usance or time credit

If a letter of credit specifies that drafts are to be drawn at any length of time, such

as 30 days, 60 days, 90 days or 120 days, after sight, it is called a usance or time

credit. Under such credit, the drafts may be drawn on and accepted by the opening

bank, or the paying bank as indicated therein. In this case, the exporter issues his draft,

presents it for acceptance, together with all the shipping documents, to the issuing

bank or to the confirming bank or to the paying bank, as stipulated in the credit. Once

the draft is accepted, this means that the accepting bank promises to pay the full

amount of the draft at a specified future date. The accepted usance draft can be

discounted in the discount market.

4．According to the adding of confirmation