飛天彩绘
对不起，搞错了！L/C risk and L/C risk preventionNowadays ,L/C is playing a more and more important role in the international trade，as it is a selfsufficient instrument which deals in documents only and does not cash in the actual transaction undertaken. Judging from the authoritative data, 68.6% settlement for the trade are paid through L/C. But on the other side, as L/C is a settlement method, based on the credit of bank and business (commecial) .So as a result, some risks also exist in the L/C though it promotes the rapid development of international trade.A trading company in Liaoning signed a contract with Jinhua company in America, sold 50,000 cubic metres of Granite (花岗岩) to HongKong. The total amount was up to 1.950 million dollars. The buyer issued a letter of credit under the contract through a bank in HongKong.The L/C required that shipment can only be effected upon the shipment notification of the ship appointed by the Applicant. Later, the representative of the buyer came to inspect the commodity. He refused to issue the shipment notification and give the excuse that the commodity has not been tested. It caused the goods to stay and the seller couldn’t receive the payment, what a heavy loss.So we introduce here something about L/C risk and risk prevention . It may have something to do with you in the future if you undertake to do export business.Based on the example, it is easy to find that applicant may add a variety of restrictive (限制的) clauses which we called “soft terms” when issuing a L/C to limit the effectiveness of the documents. As a result, when negotiating to the bank, the beneficiary must provide the document the L/C required, besides those required by the contract. What’s more, the beneficiary can’t obtain the required document through their performance behavior, and its validity maybe restricted by the buyer.The risks above is caused by the “soft terms”, also there are many other risks in the actual trading.The other risks to the beneficiary mainly reflects on the following sides:1 Failure to comply(遵从) with credit conditions2 The applicant may not or delay to open an L/C in order to avoid the market risk caused by the changes of market prices.3 The importer may open an illegal L/C to deceive(欺诈) the exporter in order to get the goods.After analysing the risks of the L/C, here are some risk prevention measures which may help you to avoid losses.Firstly, the beneficiary should examine the importer’s credit including his finacial situation before concluding a contract.Secondly, check the terms of L/C strictly to avoid the “soft terms” on receiving the L/C.Thirdly, prepare the commercial invoice required by the L/C strictly, and get the required documents including bill of ladings, insurance policy,Customs invoice,etc.Finally, prepare the goods and insure the shipment can be on time.
