EXPORT-IMPORT PROCEDURE
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1 |
Seller and Buyer conclude a sales contract,
with method of payment usually by letter of
credit (documentary credit).
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2 |
Buyer applies to his issuing bank, usually
in Buyer's country, for letter of credit in
favor of Seller (beneficiary).
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3 |
Issuing bank requests another bank, usually
a correspondent bank in Seller's country, to
advise, and usually to confirm, the credit.
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4 |
Advising bank, usually in Seller's country,
forwards letter of credit to Seller
informing about the terms and conditions of
credit.
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5 |
If credit terms and conditions conform to
sales contract, Seller prepares goods and
documentation, and arranges delivery of
goods to carrier.
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6 |
Seller presents documents evidencing the
shipment and draft (bill of exchange) to
paying, accepting or negotiating bank named
in the credit (the advising bank usually),
or any bank willing to negotiate under the
terms of credit.
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7 |
Bank examines the documents and draft for
compliance with credit terms. If complied
with, bank will pay, accept or negotiate.
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8 |
Bank, if other than the issuing bank, sends
the documents and draft to the issuing bank.
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9 |
Bank examines the documents and draft for
compliance with credit terms. If complied
with, Seller's draft is honored.
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10 |
Documents release to Buyer after payment, or
on other terms agreed between the bank and
Buyer.
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11 |
Buyer surrenders bill of lading to carrier
(in case of ocean freight) in exchange for
the goods or the delivery order.
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