Step 1 The buyer agrees to purchase goods from the seller. This agreement may be a purchase order an accepted pro-forma invoice a formal contract, or an informal exchange of messages but agreement is made as to goods being purchased, how and when they are to be shipped or insured, and how and when payment is to be effected. In this case, the agreement is to use an L/c as the mechanism of payment 经贸学觊国贸系 王学◎
经贸学院国贸系 王学惠 © Step 1 The buyer agrees to purchase goods from the seller. This agreement may be a purchase order, an accepted pro-forma invoice, a formal contract, or an informal exchange of messages, but agreement is made as to goods being purchased, how and when they are to be shipped or insured, and how and when payment is to be effected. In this case, the agreement is to use an L/C as the mechanism of payment
Step 2 The buyer applies to his bank for an L/C, signing the bank's L/C application/agreement form 1st principle of L/C: Letters of credit are documentary. 经贸学觊国贸系 王学◎
经贸学院国贸系 王学惠 © Step 2 The buyer applies to his bank for an L/C, signing the bank’s L/C application/agreement form. 1st principle of L/C: Letters of credit are documentary