In actual export business, the content of negotiation documents must be strictly consistent with the provisions of the relevant letter of credit, which is a common practice. However, it is sometimes difficult for the seller to ensure that each negotiation document is completely consistent with the content of its relevant letter of credit. The main reason is:1、 The lack of experience of the parties involved resulted in the buyer and seller not fully considering the actual problems that they would encounter when performing the contract in the future. Moreover, most current sales contracts are formed by the seller using a pre printed fixed format, filling in only a few main terms based on a specific product, and then being signed by both parties. The advantage of this signing method is that it is simple and time-saving, but the disadvantage is that the blank space left by a fixed format contract is very limited and not entirely reasonable. It is impossible to fill in the special requirements of both the buyer and the seller, especially the buyer, for a specific product. When the buyer opens the letter of credit, in order to ensure their own interests, they have to add some clauses that are not included in the contract in the letter of credit. Before adding terms, both buyers often neglect to communicate and negotiate with the seller. The seller, without any prior preparation, only became aware of any changes in the original contract terms upon receiving the letter of credit for some additional clauses, and at this point, the situation was already settled. This type of situation puts the seller in a dilemma.International logistics2、 The buyer opens a letter of credit through a bank and must pay a certain amount of collateral to the bank, which means that the letter of credit needs to occupy the buyer’s funds. Therefore, the time for the buyer to open a letter of credit is usually: the factory starts production from the date of opening the letter of credit and just completes it on the delivery date, with a maximum of one to ten days of flexible time left in between to prevent any delay.After the seller receives the letter of credit, all preparation work before export must be done intensively without any room for delay. We know that although a letter of credit essentially reflects the economic relationship between the buyer and the seller, it reflects the buying and selling relationship between the issuing bank and the beneficiary (seller) of the letter of credit in terms of form and operation. During the operation process, there is no direct contact between the issuing bank and the beneficiary, and they must be uploaded and issued through their intermediaries – the notifying bank, the negotiating bank (of course, the two can also be the same bank), and the buyer.If the letter of credit needs to be modified, from the seller’s request for modification to his receipt of the original copy of the letter of credit, even if all parties are diligent and do their best, with the fastest possible speed, it will not be less than ten and a half days. To modify the letter of credit, the bank will also charge additional fees (amendment fee and notification fee). Foreign businessmen have a strong sense of money and time. Moreover, the market situation is constantly fluctuating and changing. As buyers, they are very reluctant to change or extend the letter of credit (extending the shipping and validity period of the letter of credit, which is also one of the scope of modifying the letter of credit), in order to bear more costs and risks.Can we find a way to achieve consistency without changing the certificate, so as to ensure safe and timely foreign exchange settlement of exported goods? The practical answer is that it is possible in many cases. The following author combines practical experience to introduce several alternative methods, for your reference onlyQuestion one: In the terms of the letter of credit, some key words are written incorrectly or the references are not clear enough. How should the beneficiary handle it?For such issues, exporters should treat them differently depending on the situation. For example, there is a paragraph on a letter of credit that reads: CREDIT AVAILABLE THE ANY BANY BYNEGOTIATION AGAINST PRESENTATION OF BENEFICEARY’S DRAFTS AT LIGHT DRAWN ON YOURSELVES FOR 100PCT OF THE NETT INVOICE Value? This letter of credit will accept a sight draft issued by the beneficiary with your bank as the payer, 100% of the invoice amount, and negotiable at any bank. Regarding this paragraph, the author believes that:If we notify the bank to commit to confirmation, we can assume that there are no printing errors or unclear references, and there is no need to modify the letter of credit here;2. If the notifying bank does not commit to confirmation, YOURSELVES in the text must refer to the notifying bank or the issuing bank, or other clearly designated payment bank. Otherwise, the beneficiary will suffer losses.Letters of credit in international trade are usually mostly in English, and the English translations of place names in some non English speaking countries around the world are sometimes inconsistent. It is difficult to accurately identify who is not the same place name for different translations, for example:One English translation and another English Chinese translation: BEIJING PEKING Beijing GUANGZHOU KUANGCHOW Guangzhou XIAMEN AMOY Xiamen TAIBEI TAIPEI Taipei MOSCOW MOSKVA Moscow BUSAN PUSAN Busan VOSTOCHNY VOSTO CNYJ Dongfang PortIf similar situations occur in the letter of credit, the author believes that as long as both the buyer and the seller can agree on a certain confirmed location (must reach a consensus and cannot be ambiguous), the wording of the letter of credit shall prevail. However, if such a place name with multiple translations is exactly the destination port, transshipment port, or insurance compensation location of the goods, Creators must indicate the Chinese translated name and the name of the country or region to which the place name belongs after such place names to avoid errors.
