The argument for the status of the letter of credit in international trade, data or quotes can be

To put it simply: After the formation of large-scale capitalist industrial production, the abundance of industrial products promoted the development of the international market on a larger scale. However, there has always been a problem restricting the development of international goods, that is, there is a greater risk of the seller recovering the payment.

1. Due to the seller's greater risk awareness of timely, full and safe payment, the development of international goods has been hindered. 1. The international settlement method before the L/C service is basically commercial credit and the degree of reliability is low. 2. Even if the buyer has a high degree of creditworthiness, if the account is blocked by the court because of other factors involved in the lawsuit, even if he has money, he cannot pay the payment in time and in full.

2. The application of L/C to international settlement promotes international L/C 1. The issuing bank of L/C replaces the buyer's position as the first debtor of the payment, which makes the credit rating of payment of the payment rise to a higher bank credit, which greatly reduces the risk of collection faced by the seller. 2. In the contract of using L/C to settle the payment, as long as the seller completes the specified responsibilities and obligations within the specified time limit, the issuing bank (or its designated payment bank) pays the payment unconditionally. – even if the buyer is insolvent at this point.

In this way, the seller's collection risk is minimized, and the seller can conduct business with peace of mind (the seller needs to strengthen the review of the letter of credit).

Letter of credit plays an extremely important role in the modern international revolution and has an irreplaceable position - because, with the development of the industrial revolution, especially the continuous development of modern technology and modern transportation industry, coupled with the development of global liberalization, the international industry has become an indispensable and important factor in all countries in the world. In the international settlement, in order to solve the mutual distrust between the buyer and the seller, the bank credit is introduced, that is, the issuing bank promises to the seller with its own credit according to the buyer's request that as long as the seller acts in accordance with the requirements of the issuing bank and submits the documents specified by the issuing bank, the issuing bank guarantees to pay the seller for the goods. And this is the purchase and sale of documents between the issuing bank and the seller, independent of the contract between the buyer and the seller, and the issuing bank is the payer of the purchase and sale of the documents, and has nothing to do with the buyer - this is the letter of credit and its substance.

That is, through the introduction of bank reputation, it replaces the business reputation between the buyer and the seller, thus solving the problem that the business reputation of the buyer and seller is difficult to overcome by themselves is not recognized by the other party, that is, through the guarantee of the issuing bank, the seller is afraid that the seller will not receive the payment after delivery, and the buyer is afraid that the seller will not deliver the goods after payment, thus greatly increasing the success rate of the transaction. Therefore, the letter of credit is hailed as a great invention by merchants.

1. Advantages 1. When the settlement is made by L/C, the beneficiary (exporter) is guaranteed to receive money, especially when the exporter does not know the importer very well, and the advantages of L/C are more significant when the importing country controls foreign exchange.

2. For exporters, the biggest advantage of L/C is that it provides a reliable account - the payer, which is the bank, and it is a designated large bank. If the letter of credit obtained does not conform to the sales contract, the contract can be terminated without shipment and another claim can be made (if there is a loss of market utilization).

3. The letter of credit balances the financial burden of both parties. For exporters, after shipping the goods, they can immediately sell the documents to the bank at the place of export to obtain payment, and they can also use the letter of credit to make packaging loans.

4. The use of letter of credit as a payment method for the entire international transaction can reduce a lot of costs and save a lot of trouble. Many deals can be made by telex and do not require more work, which reduces costs and time. One of them is the investigation fee – with LC, the seller can close the deal without having to investigate the buyer's creditworthiness.

2. Disadvantages: 1. It is easy to fraud, because the letter of credit is a self-sufficient document, and the relevant bank only deals with the characteristics of documents, if the beneficiary forges the corresponding documents or makes a fake document with no goods at all, then the importer will become a victim. Although the importer can theoretically claim compensation from the exporter under the sales contract, or even resort to law, cross-border disputes are often difficult to resolve.

2. The procedures of L/C are complex, there are many links, which is not only time-consuming, but also costly, and the examination of documents and other rings also require strong technicality, which increases the cost of business.

L/C features:

1. Under the condition of L/C payment, the issuing bank is the first payer. Therefore, L/C payment is a kind of bank credit.

2. The letter of credit is a self-contained document independent of the sales contract.

3. The payment of the shed difference under the letter of credit is a kind of transaction of documents. As long as the documents submitted by the exporter after delivery are consistent with the terms of the letter of credit, the bank will guarantee to pay the exporter for the goods. The importer obtains a document representing the goods after payment.

Main documents under pre-credit closure:

1. Bill of exchange: bill of exchange or draft.

2. Invoice: invoice.

3. Bill of lading: bill of lading.

4. Insurance policy: insurance policy.

5. Packing list and weight memo.

6. Certificate of Origin: Certificate of Origin.

7. Inspection certificate: inspection certificate. Chain penitential skin.

Answer] :(1) A letter of credit is a written certificate issued by a bank to the exporter at the request of the importer (buyer) to guarantee the responsibility for payment. In the L/C, the bank authorizes the exporter to issue a bill of exchange not exceeding the prescribed amount with the bank or the designated bank as the payer under the condition that it meets the requirements of the letter of credit and the letter of credit, and to collect the payment for the goods on time and at the designated place along with the shipping documents specified in the letter of credit.

2) The role of L/C: First, to guarantee payment. Since the seller in one country does not know the creditworthiness and ability to pay of the buyer in the other country, the goods will be shipped only if the payment is made in advance or if there is a bank letter of credit guarantee.

Second, the role of financing. When the seller urgently needs money before the L/C expires, he can pledge the L/C to obtain payment from a third party (or bank). The buyer can also apply for a bank advance payment.

Third, facilitation. The credit investigation, security registration or pledge handling, and payment arrangements between the two parties have been simplified by the credit card.

L/C refers to a written voucher issued by the bank to the exporter (seller) at the request of the importer (buyer) to guarantee the responsibility of paying the purchase price. In the L/C, the bank authorizes the exporter to issue a bill of exchange not exceeding the specified amount under the conditions specified in the L/C, with the bank or its designated bank as the payer, and to collect the payment for the goods at the designated place on time with the shipping documents attached to it as required.

In international activities, the buyer and the seller may not trust each other, and the buyer is worried that the seller will not deliver the goods according to the contract requirements after the advance payment; The seller is also concerned that the buyer will not pay after shipping the goods or submitting the shipping documents. Therefore, it is necessary for two banks to act as guarantors for both the buyer and the seller, to collect and submit documents on behalf of the buyer, and to replace commercial credit with bank credit. The instrument used by banks in this activity is the letter of credit.

It is a written guarantee issued by the issuing bank to the exporter at the request of the importer that it contains a certain amount of money and pays with the prescribed documents within a certain period of time.

It refers to the transfer of financial funds using computers or stored value cards.

(1) The role of exporters.

1. Ensure that the exporter obtains the payment for the goods with the voucher.

2. Make the exporter get the foreign exchange guarantee.

3. Financing can be obtained.

b) The role of importers.

1. Ensure that the evidence of the exporter's performance of the sales contract is obtained.

2. Provide financial facilities.

3) The role of banks.

Expand business volume and increase economic benefits.

Status: Compared with T T and D P, the letter DU certificate is relatively safer, and both buyers and sellers have barriers. It is a bank letter.

Use. As long as the buyer issues the letter of credit and the seller is consistent, the buyer must pay. What it does:

1) The guarantee role of the bank is mainly manifested in two aspects: to the importer. The letter of credit can ensure that the importer can obtain the documents representing the right to the goods when paying for the goods, and can restrict the time of delivery, the quality and quantity of the goods by the exporter through the terms of the letter of credit, and refuse to pay for the redemption if the documents are not qualified.

to the exporter. The L/C guarantees the exporter the right to receive payment for the goods by submitting the documents to the bank that meet the terms of the L/C, and can guarantee the receipt of the payment even if there is a risk of foreign exchange control or market in the I-1 country.

2) The role of financing funds. A letter of credit can be used as a financing tool to facilitate financing for both parties entering and exiting the VL.