November 21, 2009
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Letter of credit instructions - LCI
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The seller provides the Letter of Credit Instructions to the buyer. The Letter of Credit Instructions contains the terms and conditions that he will require in the Documentary Letter of Credit. These instructions are contained in the Basic Ordering Agreement or provided separately with the Quotation or Proforma Invoice. These instructions are to be used by the Buyer to complete his Letter of Credit Application to the issuing bank. They contain information on the seller's advising bank, and available documents that the buyer can request as proof of value and movement.
Definition of a Letter of credit instructions
Specifies terms and conditions that are instructed to be in the letter of credit to be issued by the Applicant.
Purpose of a Letter of credit instructions
The Letter of Credit Instructions provide the Applicant of the letter of credit the specific terms and conditions that should be included in the letter of credit to be issued by his bank.
Process for a Letter of credit instructions:
The Beneficiary, or seller, provides the Applicant via the Letter of Credit Instructions the terms and conditions that he will accept when he receives the issued LC. The Applicant includes these terms and conditions in the Letter of Credit Application that he completes and submits to the issuing bank.
| FIELDS for Letter of Credit Instructions | ||
| Defined in the Letter of Credit Instructions. | ||
| Letter of Credit Terms and Conditions for Sight Payment | ||
| 1 | Type of Credit | Irrevocable Documentary Letter of Credit (UCP 500). Transferable (___) yes (___) no |
| 2 | Issuing Bank | Any international bank with an account relationship with any US bank. |
| 3 | Advising Bank | Any international bank with an account relationship with issuing bank. |
| 4 | Expiration Date | Minimum 90 days from the date of issue. |
| 5 | Applicant | Buyer's name and address. |
| 6 | Beneficiary | Seller's name and address. |
| 7 | LC Value | USD $ - US Dollars. |
| 8 | Confirmation | Confirmation charges (if required) for Applicants account. |
| 9 | Sight Payment | Payment at Sight. |
| 10 | Usance Payment | By acceptance of Draft(s) (____) days form Bill of Lading. |
| 11 | Drawee | Draft(s) drawn on Paying bank. |
| 12 | Partial Shipments | Allowed. |
| 13 | Trans Shipments | Allowed. |
| 14 | Shipment From | Any Commercial Port. |
| 15 | Ship To | Any Commercial Port. |
| 16 | Last Shipment | Expiry date of Letter of Credit minus 21 days. |
| 17 | Shipping Terms | FOB, CFR, CIF, CIP . |
| 18 | Goods Description | General description with no unit prices or quantities. |
| 19 | Available Documents- | Invoice, Bill of Lading, Packing List,
Certificate of Origin, Bill of Exchange, Certificate of Insurance, and Certificate of Inspection. |
| 20 | Presentation | Within 21 days after the date of shipment. |
| 21 | Additional Instructions | a Credit issuing bank charges for the Applicant (buyer). |
| b Credit negotiation and/or paying bank charges for the beneficiary (seller). | ||
| c Credit transferable through paying bank. | ||
| d Third party documents are acceptable. | ||