Overview
This assignment will focus on the letter of credit, a key banking document. Based on the example provided and the information about YOUR COMPANY, you will complete portions of this banking document for an export sale by YOUR COMPANY. (company on attachment) State Nevada
County Sri Lanka
Letter of Credit
The letter of credit is a key banking document. This document provides sellers with a secure way to receive payment from customers in other countries. The letter of credit is communication from a seller’s bank to the seller assuring them that the buyer’s payment will be received on time and for the correct amount as long as the seller follows the conditions stated. There are several types of letters of credit. Because they all have the same purpose, the key information on them is usually similar. That information is specified below.
Instructions
Use the specified info below (highlighted in yellow and underlined) to complete the blank letter of credit HERE Download HEREfor an export sale by YOUR COMPANY. Some information will be drawn from your GM-Challenges. The example letter of credit HERE Download HEREwill serve as a guide.
Your submission can be legibly handwritten and an image uploaded.
Key Information on a Letter of Credit
1. Advising Bank Info – name and address of the seller’s bank at the top of bank letterhead paper and numbers used for money transfers (Use the name, address and SWIFT code for the US bank from your GM-Challenge)
2. Amount – payment that is supposed to be transferred by the bank to the seller (Use 90,000 USD)
3. Advice Date – date the countdown starts toward the expiration date (Use July 1, 2024)
4. Expiration Date – date by which the beneficiary must submit the necessary paperwork in order to receive payment (Use Oct 1, 2024)
5. Beneficiary – name and address of the seller (Use the info for YOUR COMPANY)
6. Applicant – name and address of the buyer that requested the letter of credit (Use the info for YOUR BUYER)
7. Issuing Bank – name and address of the bank issuing the letter of credit at the request of the buyer (Use the info for the foreign bank from your GM-Challenge)
8. Required Documentation – the exact documents that the beneficiary must provide to the issuing bank in order to receive payment (Use 1 original and 3 copies of the signed commercial invoice; a full set of 3/3 ocean bills of lading consigned to the Issuing Bank and marked freight prepaid; and, 2 copies of the packing list)
9. Evidence of Shipment – indicates the goods shipped and the Incoterm used (Use whatever YOUR PRODUCT is – no quantity is needed; and, the Incoterm is FOB at the US port selected for your GM-Challenge)
10. Shipping Requirements – the shipping requirements the beneficiary must follow in order to be paid (Use the US port and foreign port selected for your GM-Challenge; latest shipping date of August 10, 2024; partial shipments and transshipment are not allowed; and, all banking charges outside YOUR COUNTRY are for the beneficiary’s account)
Your company
