Definition Parties Involved Procedures of L/C Payment Nature and Characteristics Contents Types
Lesson 1 Letter of Credit
Definition “Any arrangement, however named or described, whereby a bank acting at the request and on the instructions of a customer or on its own behalf, is to make a payment to or to the order of a third party, or is to accept and pay bill of exchange drawn by the third party”. --from the UCP 600
Lesson 3 Combination of Payment Modes

Combination of Collection and Standby L/C or L/G To promote its products, the seller may adopt the collection combining with L/G, which is in favor of the buyer as well as avoiding risks. The specific operation is that the exporter may collect the payment from the bank with clean bill and L/G after receiving the standby L/C and L/G complying with the contract.
Open by Airmail Open by Cable SWIFT

Lesson 1 Letter of Credit

Contents › General Information of L/C › Information Required on the Draft › Description of the Goods › Shipment Clauses › Documents › Special Clause › Bank’s Promise of Payment › A Declaration to Subject to UCP600
Lesson 3 Combination of Payment Modes

Combination of Letter of Credit and Remittance It means that the payment is partially made by L/C and the balance is paid by remittance. For example, for the transaction of ores, both parties may agree that XX percent of the invoice amount is paid by L/C with presentation of the shipment documents, the balance is paid by remittance according to the goods inspection result and the actual quality or weight after the arrival of the goods.
Lesson 3 Combination of Payment Modes

Combination of Letter of Credit and Collection It means that the payment is made partially by L/C and the balance by collection. It is usually operated in the way as follows, two bills of exchange are issued under the credit, the payment by L/C is made with the clean draft and the payment by collection is made by sight or time D/P with the presentation of the full set of documents. For the sake of safety, the clause such as “the documents delivered upon the full payment” must be stated in the letter of credit.
Lesson 2 Letter of Guarantee

Types
Tender Guarantee
Performance Guarantee Repayment Guarantee
Tender Guarantee

A tender guarantee means bank, insurance company or other involving party (guarantor) makes promise to beneficiary (tenderee), sometimes according to the instruction of the authorized bank by the guarantee applicant, that guarantor shall fulfill payment with the stipulated sum in case that applicant (tender) fails to fulfill the obligation resulted from his tender.
Lesson 1 Letter of Credit

Nature and Characteristics › Nature › Characteristics › Forms of Opening Letter of Credit
Nature

Reverse Remittance Bank Credit
Lesson 1 Letter of Credit

Procedures of L/C Payment › Application for L/C › Issuance of L/C › Advice of L/C › L/C Verification and Modification › Presentation and Negotiation › Honor and Payment
Lesson 1 Letter of Credit

Types › Irrevocable L/C › Sight L/C › Usance L/C › Transferable L/C › Revolving L/C › Reciprocal L/C › Back to Back L/C › Standby L/C › Confirmed and Unconfirmed L/C › Soft Clause L/C
Chapter 13
Letter of Credit and Letter of Guarantee
Letter of Credit Letter of Guarantee Combination of Payment Modes

Lesson 1 Letter of Credit

Lesson 2 Letter of Guarantee
Definition Types

Lesson 2 Letter of Guarantee
Definition Letter of Guarantee is a guaranty in written form issued by bank, insurance company, guarantee company or individual upon request of the applicant, promising to fulfill the payment or compensation to some extent in a certain amount of money in case that the applicant fails to fulfill the obligation.
Performance Guarantee

A performance guarantee is a promise made by a guarantor, that a guarantor with the agreed sum in case that guarantee applicant (contractor) fails to fulfill the contract concluded by beneficiary (owner) and contractor.
Repayment Guarantee

Repayment guarantee is a guarantee issued by bank, insurance company or other involving party upon request the application of one party of a contract to the other party of a contract. It is stipulated in the repayment guarantee, that the bank is committed to making reimbursement in case that the applicant fails to fulfill the obligation agreed in the contract, not returning or repaying the deposit or paid amount to the beneficiary.