1. Unit 4 Who Wins the Lion's Share !

2. Objectives
Focus
Warming up
2.1 Communicating in writing
2.2 Names and addresses
2.3 Layout and style
2.4 Thinking about your reader
2.5 Sending messages
Sum-up
Assignment

3. Documentary Credits / Documentary L/C
A letter issued by a bank
At the request of an importer of goods
The bank promises to pay a beneficiary (who?)
The bank will pay or accept draft or negotiate it if
----documents relating to the dispatch of the goods are in order ( a bill of lading, an invoice, an insurance document, one or two supplementary documents)
----shipment has been made as specified
usually exporter

4. lend its name and its good offices to the importer
For bank
lend its name and its good offices to the importer
putting itself in the place of the importer
taking the responsibility in favor of exporter
taking the risk that it is unable to be reimbursed by the importer
How to avoid it?
Look to the worthiness
Require to lodge some securities
Deposit a portion of the cost of the goods

5. For exporter
documentary L/C is a most satisfactory method of payment

6. For importer
Some considerable advantages
Pay the bank’s charges for opening the credit

7. The exporter must check the credit in his favor on
the spelling of both the exporter’s and the importer’s names
the mount of the credit (sufficient!)
irrevocable or revocable, confirmed or unconfirmed
description of the goods
quantity (about , circa)
permission of shipping the goods on deck
consideration of getting all the documents required by the buyer, such as a certificate of quality and consular invoice

8. Is it absolutely safe to be paid and receive the merchandise by the payment of L/C?
Not 100% safe.--- Banks issuing letters of credit deal in documents not in merchandise.
---The quality and quantity of merchandise shipped ultimately depends on the honesty and integrity of the seller. ---If the buyer discovers that the merchandise has been mislabeled or the cartons are empty, he should sue the seller not the bank.