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 L/C(Letter of Credit) |
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 {1} Letter of credit
 [4] Effect of letter of credit
| (1) Benefiting point for an exporter |
- If an exporter presents the documents that conforms with L/C terms : An opening bank
shoulders obligation to disburse payment and its own expenses under its own
responsibility.
- If cancelling L/C or modifying the contents of L/C: Since an exporter's consent in clear
statement is required, a unilateral tyranny of a importer or of an opening bank is
impossible.
- An early acceptance of export earning is possible and may acquire manufacturing funds
easy based on a L/C. |
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| (2) Benefits for the importer |
- Since a importer may refuse payment if an exporter fail to meet the shipping dates and
the valid period, a importer can rest assure that the goods are to be delivered within
the intended period.
- Since an exporter's payment collection insecureness is removed, a importer can, based
on the fact, present a profitable conditions when concluding a contract.
- If a importer fail to meet the payment for imported goods, the importer may obtain
early acceptance facilities from an opening bank or may utilize Usance L/C to import
on a deferred payment basis. |
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