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how to check lc | how to read lc | how to understand lc | lc explained | how to check export lc.

how to check lc | how to read lc | how to understand lc | lc explained | how to check export lc. Checking the Irrevocable Structure of the Letter of Credit, Make sure that the letter of credit issued is subject to the latest version of the uniform rules of documentary credits, UCP 600. Make sure there is no indication in the credit that the letter of credit is “revocable.” Verifying the Date of Issue, Latest Date of Shipment, and Date of Expiry: Make sure that the date of issue is indicated in the letter of credit. Make sure that you can make the shipment before the latest date of shipment. Make sure that you can present documents before the expiry date of the letter of credit. Verifying the Issuing Bank Make sure you have received the letter of credit in swift format through an advising bank in your country. Make sure that the issuing bank is a valid and trustworthy bank with whom you are comfortable working. Checking the Beneficiary’s and Applicant’s Name and Address: Make sure that the full name of your company and its address are correctly stated in the letter of credit. Make sure that the full name of the importer’s company and its address are correctly stated in the letter of credit. Checking the Letter of Credit Currency and Amount. Make sure that the letter of credit amount is correct. Make sure that the letter of credit currency is correct. Checking the Description of Goods/Services: Make sure that the description of goods and services are corresponding to the sales contract. Make sure that all goods have been covered under the commercial invoice. Checking the Documents Requested by the Letter of Credit: Ensure you can provide all documents required under the letter of credit. Make sure you can comply with the document's signature, issuance, and authentication requirements. Make sure that you can supply documents on time. Make sure that there is no document should be issued or countersigned by the applicant. Checking the Payment Terms Make sure that the payment terms quoted in the letter of credit agreement with the sales contract. Availability of Letters of Credit At Sight Letter of Credit Checking the Incoterms: Make sure that Incoterms and the shipment mode must match each other. Make sure that the “Freight Collect” and “Freight Prepaid” expressions are in accordance with the applied Incoterms. Make sure that you know your responsibilities under the Incoterms which is stated in the letter of credit. Checking the Port of Loading / Port of Discharge Make sure that the port of loading and port of discharge stated in the letter of credit is consistent with your sales contract. Checking the Letter of Credit Fees If you do not give enough attention to the letter of credit charges as an exporter, your profit margin may be reduced significantly. As a result, you have to understand the approximate cost of working with a letter of credit at the beginning of the transaction. If possible try to reflect these costs into the goods when you are giving a price offer to your customer. Courier Fee / Postage Fee”, “Advising Fee”, “Discrepancy Fee”, “Handling Fee / Negotiation Fee”, “Amendment Commission”, “Confirmation Fee”, “Reimbursing Bank Charges”. Check and Verify: Understand and determine which fees must be paid by the exporter according to the letter of credit conditions. Try to figure out how much money you have to pay for each sort of letter of credit fee. Letter of Credit Fees How to deal with high banking commissions under letters of credit as an exporter Advising Fee Discrepancy Fee Confirmation Fee Checking the Presentation Period Make sure that you are able to comply with this presentation Checking the Transshipment Make sure that transshipments are allowed under the letter of credit and that it is what you have agreed on in your sales contract. Checking the Reimbursement Instructions: Additional Conditions” or Instructions to the Paying/Accepting/Negotiating Bank”. Make sure that reimbursement instructions do not block you to receive payment via unreasonable restrictions. #HowToCheckLC, #HowToReadLC, #HowToUnderstandLC, #LCExplained, #CheckExportLC.