International Settlement

Export Letter of Credit

  1) Introduction:

  The Export Letter of Credit (L/C) is a L/C settlement service provided by our bank as the exporter's bank in accordance with the documentary L/C opened by the importer's bank. Export L/C mainly provides services, such as L/C advice, cancellation, transfer, documents examination, sending documents for reimbursement, and collection of payment.

  2) Service Features:

  In order to help clients to retrieve the export amount of money and settle the exchange our bank does the business to verify the authenticity of L/C, provide dual guarantee for payment, and check the receipts of L/C.

  3) Target Clients:

  Customers of Bank of Kunlun

  4) Business Process:

  1. Notification

  Letter of credit notification is a kind of business when we receive the L/C we will verify the authenticity and notify the customer.

  1) Check and audit the authenticity

  2) Numbering and register

  3) Notify the customers

  2. Modification and cancellation

  1) Our bank will check and audit the authenticity of the modification and cancellation of L/C.

  2) Fill the Notification of modification and cancellation of L/C.

  3) To cancel ILC there must have consent of issuing bank, confirming bank and beneficiary.

  3. L/C turns note and transferring

  1) L/C turn note is the issuing bank authorizes its abroad agent bank to notify the L/C and amendment to the exporter.

  (1) Abide by the guidance of issuing bank, transfer the content of L/C completely.

  (2) The agent bank should check the impression of legal seal, authentication, and the credit standing and respectability of issuing bank.

  2) L/C transferring is the beneficiary transfer L/C to the other exporter or exporters.

  (1) Only if there is “transferrable” marked on the L/C can be transferred and can be transferred once. The transmitting bank cannot amend any content except amount, price, time of shipment, time of surrender document, expiry date, and proportion of insurance.

  (2) The general procedure of L/C transferring: Application, Numbers and registration, check the L/C transferring letter of authentication, fill in the L/C and relevant accounting voucher, collection of bank transfer fees, fill in the transferred credit files.

  Below is important when check the L/C transferring letter of authentication:

  ① Name of issuing bank and number should be identical with the original of L/C.

  ② Name and amount of transferring cargo should be included in L/C.

  ③ Amount and unit price should be in line with the agreement.

  ④ the transferring applicant should be the beneficiary of L/C.

  ⑤ Time of shipment and expiry date should be under the agreement of L/C.

  ⑥ Time of surrender document should be under the agreement of L/C.

  ⑦ Insurance proportion is fewer than the original of L/C.

  ⑧ Transferring authorization should be clear and definite.

  ⑨ Make the right of refusing notify the second beneficiary clear and definite.

  ⑩ First beneficiary afford the transferring fee.

  4. Confirmation

  According to the authorization or requirements of issuing bank the bank which adds confirmation to L/C will be the confirming bank. The payment of confirming bank has no resource and should be an end.

  1) Requirements of confirmation

  (1) Issuing bank must be an agent of our bank and have good credit standing and respectability. And the issuing bank must have document limit, state risk limit.

  (2) The nation which the issuing bank located must has stable economy and politics.

  (3) The issuing bank has a good document contact record with our bank. And the issuing bank has a good exchange receipt record.

  (4) The beneficiary must our client who has no record of bad settlement or exchange receiving.

  (5) The confirmed L/C must has an authentic background.

  (6) The L/C must be ILC and harmful payment is not allowed.

  (7) Reimbursement to issuing bank or reimbursing bank should be allowed.

  (8) If it is clear and definite to designate us the confirming bank, notification to beneficiary must be did by us and the payer of draft must be us.

  2)  Procedure of confirmation

  (1) Check and audit the L/C. Revocable L/C is not allowed to confirm.

  (2) After confirm the L/C we will issue the notification of confirmation in time.

  (3) We will check the L/C in accordance with the international conventions.

  (4) If the L/C takes agent bank’s limit it should not take clients’ line of credit.

  (5) If our bank is incapable of confirming the L/C notification to the issuing bank must without delay.

  5.  Negotiation

  When the beneficiary submit documents to the Bank, the beneficiary should fill the customers documents contact list (see the content of the contract) in triplicate, together with the original copy of the letter of credit, letters of credit amendment thereto (if any) and the documents and sent to the Bank.

  Audit Documents.

  (1) Vertical audit. Please note whether the credit period has expired, whether the name and number of copies is in line with the letter of credit requirements, whether the pay date and the date of shipment documents submitted within the period stipulated in the letter of credit, and whether the documents are in line with the provisions of L/C.

  (2) Horizontal audit. The Bank should focus on commercial invoice, audit drafts, bills of lading, insurance policies, as well as the other documents required by the letter of credit.

  (3) Other audit points. If the L/C has designated banks for negotiation / acceptance / payment / deferred payment, the documents shall be submitted to the designated bank.

  3. Negotiation. Negotiation means that the authorized bank needs to process consideration of drafts and / or documents. Only the examination of the documents without processing consideration does not constitute a negotiation. The premise of the negotiation is obtaining the negotiating mandate of the issuing bank, accepting the documents submitted by the exporter, and the payment. The negotiation bank reserves the resource right when the issuing bank refuse to pay or fraud.

  Requirements for L/C negotiation:

  1. Issuing bank must be an agent of our bank and have good credit standing and respectability. And the issuing bank must have document limit, state risk limit.
  2. The nation which the issuing bank located must has stable economy and politics.
  3. The issuing bank has a good document contact record with our bank. And the issuing bank has a good exchange receipt record.
  4. The beneficiary must our client who has no record of bad settlement or exchange receiving.
  5. The confirmed L/C must has an authentic background.
  6. The L/C must be ILC and harmful payment is not allowed.
  7. Reimbursement to issuing bank or reimbursing bank should be allowed.

  It is important besides check and audit the L/C:

  (1) Whether the L/C is transferring L/C. If the applicant is the second beneficiary our bank will not negotiate.

  (2) The agent bank should describe the content on the face of the note of receiving exchange against the document which has already negotiated.

  (3) The limit of negotiated L/C should not exceed 180 days.

  (4) It takes agent bank’s limit when negotiation occurred.

  6) Claim for exchange

  1. Process of documents with discrepancy. If discrepancies are found in a single trial, handling bank shall promptly notify the beneficiary. If discrepancies are modified and the there is adequate modification time, return the documents to beneficiary to modify or authorized by the beneficiary bank on behalf of its modification.

  2. Documents audit is completed; the handling personnel contact the customer for opinions, export Reimbursement cover letter.

  3. According to the letter of credit payment terms, to send a note to claim exchange Reimbursement cover letter, there are two, one is to the issuing bank's "Send a single Reimbursement cover letter, the other is to reimbursing bank Reimbursement cover letter to the issuing line "Send sided letter.

  (1) Claim for exchange to the issuing bank

  A credit to the issuing bank to send a note to claim exchange, the bank all the documents should be sent to the issuing bank. Send single Reimbursement cover letter should pay particular attention to the following issues: the rise of the issuing bank; date of the cover letter should be within the validity period stated in the credit, unless electric mention or table mention discrepancies; later than credit valid certification requirements or pay a single period, but the documents submitted valid and pay a single period, should be indicated on the cover letter that the document is submitted to the validity of the credit and pay a single period. The face amount of the letter should be consistent with the amount of money order / invoice credit requirements; should be clearly marked with the letter of credit number. Document the number of copies in the cover letter should be consistent with the actual number of copies of documents and letters of credit.

  (2) Reimbursement to the reimbursing bank

  If a credit specifies another bank as reimbursing bank, should be based on the requirements of the letter of credit to reimbursing bank Reimbursement. Reimbursing bank Reimbursement can be divided into the electric claim and letter claim.

  ① Electric claim

  If a credit states can electric cable or not specified Bank audit can be specified to the letter of credit letter of credit documents in line reimbursing bank does not allow electrical claim, exchange messages should be concise. Electric claim, you do not need to send confirmation letter to the reimbursing bank, nor do they need Reimbursement cover letter mailed to the reimbursing bank.

  ② Letter claim

  If a credit states do not allow electric claim, the bank correspondence available to the reimbursing bank Reimbursement. Letter claim when I send a single row Reimbursement cover letter (see the text of the contract). Versions and the cover letter, except to the issuing bank to send a note to claim exchange should pay attention to the problem, attention should be paid to the issuing bank and reimbursing bank should fill in the correct position. For business can handle to power on behalf of Post Reimbursement take power on behalf of Post reimbursing bank Reimbursement.

  4. Send a note. Send a note credit requirement of the documents to the issuing bank. Send way of letters of credit generally have the following two kinds. (1) A bill sent reimbursing bank, the remaining documents Send issuing bank. (2) All documents sent to the issuing bank.

  7) Exchange receiving

  1.Collection. According to different area, currency, and receiving method our bank should estimate the receiving time by mail time and the time of issuing bank’s work. Or check the time of sign of the issuing bank. If the business under usance L/C stays over 2 days of the time of acceptance or promising payment the time of us estimated. The agent bank should telephone the issuing bank or payment bank to collect.

  2.Receipt. After receipt of issuing bank’s payment our bank should transfer the money according to clients’ requirements.

中科汇联承办,easysite内容管理系统,portal门户,舆情监测,搜索引擎,政府门户,信息公开,电子政务