国际结算 英文版5.1-5.5 Letters of credit(1)

Copyright by Fei Zhonglin School of Economics and Management, NJUT15. Letters of credit5.1-5.5 General introduction5.1 Definition 5.2 Procedures 5.3 Characteristics5.4 Parties’ liabilities and rights5.5 contents5.6 Examination of a documentary credit5.7 Types of credit5.8 Financing provided by banksCopyright by Fei Zhonglin School of Economics and Management, NJUT2About UCPThe formal maturation of the letter of credit was in the 1920’s;ICC Uniform Customs and Practice for Documentary Credit (UCP)Versions of 1933,1951,1962, 1974,1983 and 1993(UCP500);The latest version is UCP600ISBP subject to UCP 600 (ICC Publication No. 681)Copyright by Fei Zhonglin School of Economics and Management, NJUT 35.1 What is a letter of creditAccording to UCP600 Article 2: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 .信用证指一项不可撤销的安排，无论其名称或描述如何，该项安排构成开证行对相符交单予以承付的确定承诺。

Copyright by Fei Zhonglin School of Economics and Management, NJUT 4“Provided that the stipulated documents are presented to the nominated bank or to the issuing bank and that they constitute a complying presentation, the issuing bank must honour...”In simple terms, a credit is a conditional bank undertaking of payment.In UCP600 Article 7 a.Copyright by Fei Zhonglin School of Economics and Management, NJUT5Irrevocable:“A credit is irrevocable even if there is no indication to that effect.”In 500, the Art 2 gave the meaning of credit and four types of L/C, and in Art 6 theirrevocable and revocable L/C were listed at the same time,The revocable L/C has been deleted and all L/Cs are irrevocable under UCP600.In UCP600 Article 3 InterpretationsCopyright by Fei Zhonglin School of Economics and Management, NJUT 6Undertakeing:to put oneself under obligation to perform; also to accept as a charge or responsibility该词在英美法中具有特定含义，专指行为人单方自行承担的一种义务，无须对价支持即具有可执行性，一般具有无因性、独立性，不受其可能基于的其他交易下的抗辩影响。

UCP600中译为“承诺”、“责任”、“承担……责任”Copyright by Fei Zhonglin School of Economics and Management, NJUT 7Issuing bank （开证行，opening bank) “means the bank that issues a credit at the request of an applicant or on its own behalf.”It is usually the bank located in the importer ’s place.In UCP600 Article 2 DefinitionCopyright by Fei Zhonglin School of Economics and Management, NJUT 8Honour （承付）means:a. to pay at sight if the credit is available by sight payment. （即期付款信用证）b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment. （延期付款信用证）c. to accept a bill of exchange (“draft ”) drawn by the beneficiary and pay at maturity if the credit is available by acceptance. （承兑信用证）In UCP600 Article 2 DefinitionCopyright by Fei Zhonglin School of Economics and Management, NJUT9Complying presentation （相符交单）means a presentation that is in accordancewith the terms and conditions of the credit, the applicable provisions of these rules,and international standard banking practice.Compared with UCP500: “…against stipulated document(s), provided that the terms andconditions of the credit are complied with ”（单证相符）In UCP600 Article 2 DefinitionCopyright by Fei Zhonglin School of Economics and Management, NJUT105.2 Parties to a letter of creditBasic partiesApplicantBeneficiaryIssuing bankApplicationSales ContractL/CCopyright by Fei Zhonglin School of Economics and Management, NJUT 115.3 Procedures of a documentary credit operationCopyright by Fei Zhonglin School of Economics and Management, NJUT 12Copyright by Fei Zhonglin School of Economics and Management, NJUT 135.4 Characteristics of a creditA written undertaking on the part of the issuing bankArt. 7 b.An issuing bank is irrevocablybound to honour as of the time it issues the credit.Art. 6 c. A credit must not be issued available by a draft drawn on the applicant.Bank creditCopyright by Fei Zhonglin School of Economics and Management, NJUT14Independent of the sales contractArt 4 a.A credit by its nature is a separate transaction from the sale or other contract on which it may be based. Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is included in the credit.The parties to a letter of credit are only bound by the terms and conditions of the credit itself.Copyright by Fei Zhonglin School of Economics and Management, NJUT 15Exclusively dealing with documentsArt 5 :Banks deal with documents and not with goods, services or performance to which the documents may relate.Under UCP500:The documents comply with the terms and conditions of the credit anddocuments are consistent with one another. （单单一致，单证相符）Copyright by Fei Zhonglin School of Economics and Management, NJUT 16Applicant （开证申请人）“means the party on whose request the credit is issued.”It isthe buyer under the sales contract account party (US)consignee （收货人）on the Bill of LadingIn UCP600 Article 2 DefinitionCopyright by Fei Zhonglin School of Economics and Management, NJUT 17Applicant ’s liability and rightsSubmit application for issuing a credit inaccordance with the stipulation of sales contract and pay a certain percentage of cash deposits;Make payment to the issuing bank if there ’s complying presentation;Examine the documents received from issuing bank and has the right to refuse payment if discrepancies （不符点）are found.Copyright by Fei Zhonglin School of Economics and Management, NJUT 18Beneficiary （受益人）“means the party in whose favour a credit is issued.”It isthe seller under the sales contractconsignor （发货人）on the Bill of LadingIn UCP600 Article 2 DefinitionCopyright by Fei Zhonglin School of Economics and Management, NJUT19Beneficiary ’s liabilities and rightsCarry out the contract and complete the export documents;Examine the L/C to see whether the terms and conditions on the credit comply with those in the sales contract;Obtain the payment if no discrepancy among above documents;Refuse the L/C and ask for amendment if there ’s any discrepancy.Copyright by Fei Zhonglin School of Economics and Management, NJUT20UCP600 Article 7 Issuing Bank undertakinga . Provided that the stipulated documents are presented to the nominated bank or to theissuing bank and that they constitute a complying presentation, the issuing bank must honour, if the credit is available by ……b. An issuing bank is irrevocably bound to honour as of the time it issues the credit.c. An issuing bank undertakes to reimburse a nominated bank that has honoured or negotiated a complying presentation and forwarded the documents to the issuing bank ……Copyright by Fei Zhonglin School of Economics and Management, NJUT 21Open L/C according to the instruction of the application and get the deposits from the applicant;Refuse to pay if there ’s any discrepancy with the documents submitted.Issuing bank ’s liability and rightCopyright by Fei Zhonglin School of Economics and Management, NJUT 22In UCP600 Article 2 DefinitionNominated bank （指定银行）means the bank with which the credit is available or any bank in the case of a credit available with any bank.Copyright by Fei Zhonglin School of Economics and Management, NJUT 23In UCP600 Article 2 DefinitionNegotiation 议付means the purchase by the nominated bank of drafts (drawn on a bank other than thenominated bank ) and/or documents under a complying presentation , by advancing or agreeing to advance funds to the beneficiary on or before the banking day on whichreimbursement is due to the nominated bank.Copyright by Fei Zhonglin School of Economics and Management, NJUT 24Other partiesAdvising bank/ Transmitting bank 通知行/转递行 Confirming bank 保兑行Paying bank/ Accepting bank 付款行/承兑行Negotiating bank 议付行Copyright by Fei Zhonglin School of Economics and Management, NJUT25Advising bank/ Transmitting bankA bank in the seller ’s country that receives the credit from the issuing bank.To check the apparent authenticity of the credit; to inform or advise the seller (beneficiary) that the credit is available.“An advising bank …advises the credit and any amendment without any undertaking to honour or negotiate .”(Art. 9 a)Copyright by Fei Zhonglin School of Economics and Management, NJUT 26Usually selected by the issuing bank.An advising bank may utilize the services ofanother bank (“second advising bank ”), the latter has the same right with the former.Note that unless the credit specifies otherwise, the beneficiary is not required to present documents to or through the advising bank.Copyright by Fei Zhonglin School of Economics and Management, NJUT27Confirming bank (UCP600 Art.2)Confirming bank means the bank that adds its confirmation to a credit upon the issuing bank ’s authorization or request.Confirmation means a definite undertaking of the confirming bank, in addition to that of the issuing bank, to honour or negotiate a complying presentation.a Confirming Bank acts the role of second Issuing Bank, therefore it should undertake the same responsibility as the Issuing Bank.Copyright by Fei Zhonglin School of Economics and Management, NJUT28The Paying Bank/Accepting BankThe bank nominated by the issuing bank, to which the beneficiary is directed to present documents for payment, acceptance, or a deferred payment.To claim reimbursement from the Issuing Bank after payment.Lose its right of recourse to the beneficiary after payment.The Paying Bank is the drawee bank of the draft drawn by the Beneficiary, and the payment of the drawee will discharge the draft.Copyright by Fei Zhonglin School of Economics and Management, NJUT 29The Negotiating BankDifference from the paying bank:Has the right of recourse to the beneficiary.Copyright by Fei Zhonglin School of Economics and Management, NJUT30Benefits for the exporterBank credit is better than trade credit.The payment commitment is made by a third party —a bank.Most banks, in most countries, are responsible and reliable, and generally believed to adhere to ethical business practices and to exercise prudence in their commercial dealings.The precondition for obtaining payment is to provide the correct documents to the issuing bank at the right place on time.Benefits for the importerThe Issuing Bank provides credit to him once issuing the credit.The ability to obtain a letter of credit expands the buyers purchasing power.Only creditworthy buyers can obtain an L/Cfrom the issuing bank.Cash deposits will be required for those whoare not creditworthy.Copyright by Fei Zhonglin School of Economics and Management, NJUT31。