The characteristics of the letter of credit

发表时间：2012-06-16 浏览次数：132

the characteristics of the letter of credit

(1) a letter of credit is in their own bank credit to guarantee payment, therefore, in the form of letters of credit, the banks bear the primary responsibility for payment, the letter of credit is to replace the commercial bank credit credit, this feature greatly reduced as a result of transactions between businessmen of the uncertainty caused by the uncertainty of payment for the import and export both sides to provide a lot of protection.

(2) although the letter of credit to trade contracts for the foundation, but once it opened, it became independent of the contract other than a contract. “ucp500” provisions of section 3 of the letter of credit may be used as the basis with the sales contract is independent of each other transactions, even if the contract mentioned in the letters of credit, the banks has nothing to do with the contract, and not be bound by. thus, all the parties to rely on credit terms of the letter of credit act, a letter of credit as the sole basis. if the exports to the fully consistent with the provisions of the letter of credit documents, we can guarantee the secure and rapid exchange earnings. export to fulfil their terms of the letter of credit, and letters of credit issued with terms consistent with the documentation, and does not guarantee that he fully perform the contract, on the contrary, if the export side to earnestly carry out the contract, but failed to provide the documentation consistent with the letter of credit, banks were also dishonour.

(3) a letter of credit is purely business documents trading. “ucp500” under article 4: in the letter of credit business, all parties concerned are dealing with a document rather than the document involving goods, services or other acts. once a letter of credit so that the trading relationship with the phase separation, the international sale of goods throughout the trading session an independent trading - trading documents.

(4) a letter of credit in line with strict application of the principle. strictly in line with the so-called principles, also known as the documentation consistent with the principle that the beneficiary is in the documentation submitted to the bank for payment, these documents should be on the surface in full compliance with the requirements of letters of credit, bank to be paid. consistent document requested documents and letters of credit only on the surface, meaning exactly the same, the banks of any documentation in the form of completeness, accuracy, authenticity, as well as forged or legal effect, and so will not be responsible for.

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