Types of Letter of Credits

Topics: Legal documents, Contract law, Letter of credit Pages: 22 (6885 words) Published: June 8, 2011
CONTENTS OF LETTER OF CREDIT 1. 2. 3. 4. 5. 6. Name and Complete address of opening bank, with other contacts etc. Test Code. Number of Letter of Credit. Date of issue of Letter of Credit. Sequence of Total (Number of L/Cs being transmitted) Form of documentary credit. Revocable or Irrevocable. 7. Applicable rules. Latest UCP 8. Date and place of expiry. 9. Applicant’s Name and Complete address. 10.Beneficiary’s Name and Complete Address. 11.Currency Code and amount. EUR 50000 12.Bill of Exchange. Sight or Usance. 13.Drawee of Bill of Exchange. Habib Bank Ltd. 14.Partial Shipment. Allowed/Not Allowed. 15.Transshipment. Allowed/Not Allowed 16.Port of loading/ dispatch. London 17.Port of destination. Karachi. 18.Latest Date of Shipment. Not after that date. 19.Complete Description of Goods. 20.Documents Required. a) Signed Commercial Invoice in Octuplicate, not exceeding the amount of credit made out in the name of opener and certifying merchandise of German origin. b) Insurance Covered by opener, all shipment under this credit must be advised by you immediately after shipment direct to M/s Adamjee Insurance Company, 49-Hadi Road, Lahore, Pakistan and applicant, referring to their Cover Note # ADM/HBL/GM/2523/07 giving full detail of shipment. A copy of this advice must accompany with full set of documents. c) Full set of Clean Shipped on Board Bill of Lading, drawn or endorsed in the favour of Habib Bank Ltd, Showing Freight Pre-Paid. d) Weight and packing list required in duplicate. e) Certificate of origin in duplicate, certifying goods to be of German Origin.

Additional Conditions. 1. Shipping documents must evidence shipment according to the terms of L/C 2. Stale, Claused, Blank Back Bill of Lading not acceptable. Bill of Lading prior to the date of this L/C not accepted. Shipment/Transshipment on Israeli Flag, Vessel not allowed. 3. Goods are imported under L/C Number GM/0299/1355/07 H.S. Code Number 0801.1990 which should appear on Bill of Lading, Invoices, Packing List and Certificate of Origin. WE HEREBY ENGAGE WITH THE DRAWER AND / OR BONAFIDE HOLDER THAT DRAFT DRAWN AND NEGOTIATED IN CONFORMITY WITH TERMS OF THIS CREDIT WILL BE DULY HONOURED. CHARGES. All charges outside Pakistan i.e. Advising, Negotiating are on account of beneficiary. REIMBURSEMENT INSTRUCTIONS. We authorize you to debit our Nostro Account being maintained with you, if all the terms and conditions of this letter of credit have been complied, and you would certify it on the covering schedule of documents to be sent by you.

 financial documents  Transport documents.  Commercial documents.

 Bill of exchange.  Both sight and usance.

     Bill of lading. Airway bill / air consignment note. Railway receipt. Truck receipt. Post parcel receipt

      Commercial invoice. Weight / packing list. Inspection certificate. insurance policy Insurance cover note. Certificate of origin.

 Revocable.  Irrevocable.  irrevocable confirmed

 Red claused.  Green claused.

 It can be cancelled any time by any party just by information or not implementing on expiry.  this letter of credit is practically not operative

 It cannot be cancelled unless all the parties involved in letter of credit agree to it.  All parties means: - opener, opening bank, advising bank, negotiating bank and beneficiary.


 This letter of credit must be confirmed by any bank at the choice of beneficiary, it should be a negotiation bank.  This confirmation further provides guarantee to seller about getting the value of goods

 Through this letter of credit, opening bank requests the advising/negotiation bank to provide funds to the beneficiary in advance.  This amount is adjusted at the time of negotiation.

 Through this letter of...
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