IS480 Team wiki: 2015T1 A3xy ProjectOverview
|Request Shipping Guarantee|
|Request Trust Receipt|
|Accept LC Amendment|
|Request Banker's Guarantee|
Source: Irrevocable Letter of Credit
- Importer (applicant) : The party who buys goods from a foreign country for future sale or trade, and who is liable for the payment.
- Exporter (beneficiary) : The party who sells its goods to an importer in another country for sale, exchange,etc.
- Letter of Credit : A letter issued by a bank to another bank in a different country to serve as a guarantee for payments made to a specified person under specified conditions.
- Issuing Bank : Buyer’s or importer's bank which establishes (opens) a letter of credit (L/C) in favor of a beneficiary (seller or exporter), forwards it to an advising bank (seller’s or exporter’s bank) for delivery to the beneficiary, and commits itself to honor demand drafts drawn by the beneficiary against the amount specified in the L/C.
- Advising Bank : Seller’s or exporter’s that receives a letter of credit (L/C) from the issuing bank for authenticating it and informing ('advising') the exporter (the L/C's beneficiary) that a L/C has been opened by the importer in the exporter's favor.
- Bill of Lading : A legal document between an exporter of a good and a transporter or carrier as a contract of carriage of goods and details a shipment of merchandise and gives title of that shipment to a specified party
- Bill of Exchange : A written order to a person requiring them to make a specified payment to the signatory or to a named payee; a promissory note.
- Banker’s Guarantee : A guarantee from the advising bank to the exporter ensuring that if the importer fails to settle a debt, the bank will cover it
- Shipping Guarantee : A written guarantee, issued by the bank which will bear joint liability, and is presented by the importer to the carrier for picking up the goods in the case of arrival of cargo prior to the shipping documents (bill of lading)
- Trust Receipt : A type of short-term loan to provide the importer with financing to settle goods imported under Letter of Credit where title of goods is held by the bank (e.g. taken when importer can’t pay back before reselling the goods)
- Bill Discounting : Cashing or trading a bill of exchange at less than its par value and before its maturity date (When a buyer buys goods from the seller, the payment is usually made through letter of credit. The credit period may vary from 30 days to 120 days. Depending upon the creditworthiness of the buyer, the advising bank discounts the amount that needs to be paid at the end of credit period.)