Utilization
•
Buyer
6. The buyer (a) reviews the document package making
certain the documents are in conformity with the terms of
the credit, and (b) makes a cash payment (signs
a sight
draft) to the issuing bank, or if the collection order allows,
signs an acceptance (promise to pay at a future date).
•
Issuing Bank
7. The issuing bank sends the document package by mail or
courier to the buyer who then
takes possession of the
shipment.
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Availability
•
Availability refers to the availability of proceeds (funds) to
the beneficiary (seller) after presentation of documents
under the credit. Each of the
following forms of payment
availability must be specified in the original credit, and be
accepted by the seller.
•
For example, if the original agreement between the buyer
and seller calls for a sight credit (immediate
availability of
funds to the seller) and a usance credit (funds available in
30, 60 or 90 days) is prescribed in the credit presented to
the seller, the seller may reject the credit and the
transaction.
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