Complying With the Documentary Credit

Complying With the Documentary Credit
•
Seller/Exporter/Beneficiary
•
Upon receipt of the documentary credit, the seller should 
immediately and carefully examine it to ensure it conforms 
with the original sales contract with the buyer and that all 
the conditions stated in the credit can be met. If any of its 
conditions have to be amended, which can be 
time-consuming, the seller should immediately contact the 
buyer.
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Complying With the Documentary Credit
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Examining the Documentary Credit
1. The following is a checklist for the seller's examination of 
the credit:
2. The buyer's and seller's names and addresses are correct.
3. The amount of the credit is in accordance with the contract, 
including unit prices, shipping charges, handling costs, and 
total invoice amounts.
4. The merchandise description is consistent with the sales 
contract.
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Complying With the Documentary Credit
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Examining the Documentary Credit
5. The credit's payment availability agrees with the contract 
conditions.
6. The shipping, expiration, and presentation dates allow 
sufficient time for processing the order, shipping the 
merchandise, 
and 
preparing 
the 
documents 
for 
presentation to the bank.
7. Partial or transshipments are specified correctly.
8. The point of dispatch, taking charge of the goods, loading 
on board, or of discharge at final destination are as agreed.
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Complying With the Documentary Credit
•
Examining the Documentary Credit
9. Insurance coverage and party to pay charges are as agreed.
10. Instructions on whom the drafts are to be drawn, and in 
what tenor (maturity dates), are correct.
11. The credit is confirmed or unconfirmed as agreed. 
12. There are no unacceptable conditions.
13. The specified documents can be obtained in the form 
required.
14. The issuing (or confirming) bank is known to the seller.
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