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Immunization of LC |
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Immunization of LC |
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- The names of the parties, as well as the data and information in the cases stated below, have been sanitized in order to protect the identity of the parties involved.
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The UK-based Sitrpo says in its survey report Exporters' Problems with Commercial Letters of Credit that 48% of the LCs received by the UK exporters are erratic/defective. It is said that 50-70% sets of documents are found discrepant at first presentation. One way to immunize the LC and documentation against the epidemic of errors/defects is the vaccination of LC terms negotiation during sales contract negotiation and LC application inclusion in the sales contract. What approach the exporters generally and usually have in use of LCs - is it "send me LC and I will send you goods"? If yes, this is certainly a defective approach prone to defective LCs prone to discrepancies in documentation. What approach the issuing banks have in issuing LCs - is it "act upon the application as it is and issue LC"? Please comment. Let us work how to improve LC practice at the application/issuance stage. How to make LC training helpful for application/issuance practice improvement purposes?
R.M.
Dear R.M.,
From my experience in dealing with L/C disputes and litigations, there are lots of reasons for payment dishonour due to discrepancies. Here they are:
T. O.
- The I/E firm owners usually do not know ...
- They do not provide ...
- The personnel professionals do not know ...
- The L/C department of a bank is one of the most ...
- For the same reason, fewer and fewer young people would be interested in ...
- A lot of L/C disputes originate from ...
- Now ICC tries to cure such problems by ...
- From my experience, some of the disputes, payment dishonour and fabricated discrepancies are created not due to ..., but due to ...
- Some forward looking financial controllers are now hiring us to provide ...
- To help those university students to prepare their theses, bankers to prepare for CDCS examination. and those L/C practitioners who want to know more about the UCP, transport issues, cargo insurance, commodity trades, chartering and related technologies, we put all these information and CDCS exercises in our website www.tolee.com. We hope this would help.
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