THE IMPORTANCE OF DOCUMENTARY LETTER OF CREDIT IN INTERNATIONAL TRADE
THE IMPORTANCE OF DOCUMENTARY LETTER OF CREDIT IN INTERNATIONAL TRADE
Group 20
Contents
Abstract
Documents play a major role in international commodity trade - indeed, standard payment procedures (“documentary credit”) rely on them. This paper mention to the categorize the different kinds of Documentary credit and the position of payment method in promotion of international transactions. Then, referring to two important role of Documentary letter of credit in international trade as verification institution and assurance of payment and also warning company to avoid fraud in trade.
Introduction
In the business world, both sides of the transaction and contract of purchase and sale of goods, it follows that on against opposite side promise to deliver goods or provide a service and or receipt of funds have been the guarantee of sufficient financial and credit. Collected this conflict of interest is in the form of letters of credit and special banking mechanisms.
Currently, the most common and most important method of payment in business transactions is letters of credit practices that have special rules and known uniform regulations as UCP600 letters of credit. Letters of credit is commitment that assumes opening bank credit in return for obtaining certain documents requested by the applicant credit pay demands of interest credit or the seller.
In this report, we willing to finger it out the question: “The important of letter credit in international trade”. Structural of report includes three Chapters:
Chapter 1: Systematize the kind of Document letter of credit and the different between each kind
Chapter 2: Give some international trade background, the trend in world trade and consider the way of method payment by Documentary credit in international trade
Chapter 3: Find out the role of paying in transactions and promoting in international trade by Documentary letter of credit
1. Definition
Group 20
Contents
Abstract
Documents play a major role in international commodity trade - indeed, standard payment procedures (“documentary credit”) rely on them. This paper mention to the categorize the different kinds of Documentary credit and the position of payment method in promotion of international transactions. Then, referring to two important role of Documentary letter of credit in international trade as verification institution and assurance of payment and also warning company to avoid fraud in trade.
Introduction
In the business world, both sides of the transaction and contract of purchase and sale of goods, it follows that on against opposite side promise to deliver goods or provide a service and or receipt of funds have been the guarantee of sufficient financial and credit. Collected this conflict of interest is in the form of letters of credit and special banking mechanisms.
Currently, the most common and most important method of payment in business transactions is letters of credit practices that have special rules and known uniform regulations as UCP600 letters of credit. Letters of credit is commitment that assumes opening bank credit in return for obtaining certain documents requested by the applicant credit pay demands of interest credit or the seller.
In this report, we willing to finger it out the question: “The important of letter credit in international trade”. Structural of report includes three Chapters:
Chapter 1: Systematize the kind of Document letter of credit and the different between each kind
Chapter 2: Give some international trade background, the trend in world trade and consider the way of method payment by Documentary credit in international trade
Chapter 3: Find out the role of paying in transactions and promoting in international trade by Documentary letter of credit
1. Definition