djamal-soft
الثلاثاء، 9 سبتمبر 2014
Having the money to do business, without having to work in cash and with a good name behind you is always nice. A Letter of Credit is a written promise by an importers bank to the exporter's bank that an amount in a specific currency will be paid within a certain time. There are conditions that will have to be adhered to and certain documents need to be forwarded. The documents that are needed are a Clean Bill of Lading, Commercial Invoice and a Certificate of Origin.
These are normally used when one buys something from overseas and the transaction is between suppliers in one country to another. This form of letter is controlled by the International Chamber of Commerce. These letters cannot be changed or cancelled unless both parties approve of it.
The reason that the buyer will insist on this is so that he will feel more confident that he will actually get paid. Working with a person one does not know can be a risk in itself and at times the buyer will pull out for whatever reason leaving the seller without payment. Sometimes the order can be very large and has the potential to cause financial difficulties if things don't go according to plan.
In some cases the bank will even issue a Standby Letters of Credit promising that the payment will be made even if the buyer is unable to pay for them himself. A Clean Bill of Lading is made by a shipping company that records the condition, quantity and packaging of all goods that are being shipped. These are always insisted upon by importers and their banks.
A Foul Bill of Lading is given by the carrier stating that the goods that were received prior to shipping looked damaged and wet and not in good condition. Normally the importers and their banks will not accept these for payment. It is also referred to as an Unclean Bill of Lading.
A Commercial Invoice is also used in foreign trade. This is provided by the corporation that is exporting a product across international borders. Some information will be needed to ensure that this is legal such as the names of both parties and what kinds of goods are being shipped. The country that manufactured the product and the Harmonized Systems codes will need to be clearly stated.
The Harmonized System code is numbers and names of a certain product. This is generally a numbered code that is comprised of eight digits and in some cases two extra numbers are added. Every product is assigned a number according to the function and form. If one is transporting frozen peas this will be a different classification to fresh peas.
If a company creates a new product it could become expensive to correct the classification. These could also cause delays as different countries have restrictions on certain product crossing their borders. Having letters of credit will ensure that once the products arrive at its destination everyone will be covered and payment is guaranteed.
These are normally used when one buys something from overseas and the transaction is between suppliers in one country to another. This form of letter is controlled by the International Chamber of Commerce. These letters cannot be changed or cancelled unless both parties approve of it.
The reason that the buyer will insist on this is so that he will feel more confident that he will actually get paid. Working with a person one does not know can be a risk in itself and at times the buyer will pull out for whatever reason leaving the seller without payment. Sometimes the order can be very large and has the potential to cause financial difficulties if things don't go according to plan.
In some cases the bank will even issue a Standby Letters of Credit promising that the payment will be made even if the buyer is unable to pay for them himself. A Clean Bill of Lading is made by a shipping company that records the condition, quantity and packaging of all goods that are being shipped. These are always insisted upon by importers and their banks.
A Foul Bill of Lading is given by the carrier stating that the goods that were received prior to shipping looked damaged and wet and not in good condition. Normally the importers and their banks will not accept these for payment. It is also referred to as an Unclean Bill of Lading.
A Commercial Invoice is also used in foreign trade. This is provided by the corporation that is exporting a product across international borders. Some information will be needed to ensure that this is legal such as the names of both parties and what kinds of goods are being shipped. The country that manufactured the product and the Harmonized Systems codes will need to be clearly stated.
The Harmonized System code is numbers and names of a certain product. This is generally a numbered code that is comprised of eight digits and in some cases two extra numbers are added. Every product is assigned a number according to the function and form. If one is transporting frozen peas this will be a different classification to fresh peas.
If a company creates a new product it could become expensive to correct the classification. These could also cause delays as different countries have restrictions on certain product crossing their borders. Having letters of credit will ensure that once the products arrive at its destination everyone will be covered and payment is guaranteed.
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