1.

**B/E (Bill of Exchange):**

- B/E is a financial document or promissory note signed by the seller (payer), ordering the buyer to pay a certain amount of money at a later date.
- This is a major means of payment in international trade, often used when there is trust between the transacting parties.

2. **B/L (Bill of Lading):**

- B/L is a document documenting goods transported by sea.
- It performs three main functions: as a shipping document, as a document of ownership, and as a document requiring the goods to be delivered to the recipient.

3. **L/C (Letter of Credit):**

- L/C is a form of international payment guarantee, certified by the buyer's bank, committing to pay the seller when the conditions specified in the L/C are met.
- L/C helps reduce payment risks, especially when there is distrust between buyer and seller.

4. **Payment methods in international payments:**

- **Advance Payment:** The buyer pays money before the goods or services are provided.
- **Wire Transfer Payment:** Buyer transfers money directly to the seller's account.
- **Payment through bank (Bank Draft):** The seller receives payment through the bank, helping to increase trust between the two parties.
- **Open Account:** The buyer is allowed to pay after receiving the goods, based on a previous agreement with the seller.

Chapter 1
OVERVIEW OF INTERNATIONAL PAYMENT
In this chapter
1.Definitions and features
2.Roles of International Payment
3.Legal framework regulating International Payment
4.Conditions for International Payment
5.Parties involved in International Payment
1. Definitions and Features
●Foundation basis
●Definitions
●Features
1.1. Foundation basis
Foreign Trade Operation
-International Payment
-Transportation in Foreign Trade
-Insurance in Foreign Trade
-Law in International business
-Foreign exchange

1.2. Definitions
●International payment is the execution of payment duties and beneficial interest based on economic and non-economic activities between organizations and/or individuals from 2 countries or
more; or between a nation and international organizations, via banking relation in revelant countries.

1.2. Definitions
●Trade payment
●Non-trade payment

1.3. Features
●International Payment is governed by internation law and practices.
●International Payment is conducted mostly via banking system. -> At least 2 banks would participate.
●Cash is not mostly used in International payment.
●At least one party use a foreign currency (except for the case of Common currency)
●English is the main language in International payment.
●Dispute settlement by arbitrators or courts base on both sides’ agreement.

2. Roles of International Payment

●For the economy
●For international businesses
●For commercial banks

2.1. For the economy

●Enhancing a country’s Foreign trade operation
●Enhancing FDI and FPI
●Expanding services: tourism, international cooperation, ...
●Attracting Remittance (transfer of money by a foreign worker to an individual in his or her home country) and other financial resources.
●Enable national financial market to integrate globally.

2.2. For Exporter/Importer

Exporter
Importer
Goods
Ownership / Title
Payment

2.3. For commercial banks

●Domestic operations
●International Operations
•International Payments- Advanced payment- Open account- Remittance- Collections- Documentary Credit
•FOREX Trading
•Trade finance
•Bank’s Guarantee in International Trade
•International credit

3. Legal framework regulating International payment

1.International treaties
2.National Laws
3.International practices

4. Conditions for International Payment

●Currency terms
●Place of payment
●Time of payment
●Mode of payment
4.1. Currency terms
●Kinds of currency: Accounting currency / Payment currency / ...
●Foreign exchange risk management

4.1.1. Kinds of currency

●Based on usage scale
-National currency
-International currency
-World currency

4.1.1. Kinds of currency

●Based on convertibility
-Freely convertible currency
-Internal convertible currency
-External convertible currency (full / partial)
-Non-convertible currency

4.1.1. Kinds of currency

●Based on forms of existence
-Cash
-Credit currency
●Based on popularity in international payment
-Strong currency
-Weak currency
●Based on purpose of using in international payment
-Accounting currency
-Payment currency

4.1.2. Foreign exchange risk management

●Forward contract
●Swap
●Options
●Futures contract

4.2. Place of payment

●Exporter’s country
●Importer’s country
●Third party’s country

4.3. Time of payment

●Advance payment / Down payment
●Prompt / Immediate payment
-COD: Cash on Delivery
-COB: Cash on Board
-CAD: Cash against Documents
-COR: Cash on Receipt of cargo
●Deferred payment

4.4. Mode of payment

●Mode of payment: process and conditions, via banking system, for the buyer to make payment and receive goods; and the seller to deliver and receive money based on their international sale
contract.

4.4. Mode of payment

5. Parties involved in International Payment
●The Buyer, Seller, Manufacturer and their Agents
●Banks
●Carrier
●Insurer
●Government and commercial authorities

Chapter 2
MEANS OF PAYMENT

In this chapter
1.Bill of exchange (B/E)
2.Promissory Note
3.Cheque / Check
4.Payment cards

1. Bill of Exchange
1.Definition
2.Features
3.Forms and content
4.B/E acceptance
5.B/E endorsement
6.B/E guarantee
7.B/E Protest
8.B/E discount
9.Classification

1.1. Definition
●Bill of exchange means a valuable paper created by a drawer, requesting the drawee to pay unconditionally a specific sum upon demand or upon a fixed time in the future to the beneficiary.
(Article 4.2, Law on Negotiable instrument 2005)

1.1. Definition
●An unconditional order in writing from the drawer (usually seller) to the drawee (e.g.confirming bank or issuing bank), directing the drawee to pay a specified amount to a named drawer at a
fixed or determinable future date.
English Bill of Exchange Act of 1882

1.1. Definition
●Law governing:
- Uniform Law for Bills of Exchange – Geneve Convention 1930 (ULB 1930)
- Bill of Exchange Act of 1882
- Uniform Commercial Codes of 1962” (UCC)
- Law on Negotiable instruments - Luật các công cụ chuyển nhượng Việt Nam 2005.

Parties involved
●Drawer
●Drawee
●Beneficiary

1.2. Features
●Abstraction
●Obligatory payment
●Circulation

1.3. Forms and content

General requirements
●B/E has to be made in written form
●B/E can be typed, handwritten or in fixed format
●Language: English, Vietnamese, …
●B/E cannot be written with erasable ink, red ink, pencil or with any correction.
●Number of B/E: usually 2

1.4. B/E Acceptance

●B/E Acceptance acts as a confirmation for payment from the drawee when B/E is due.
●Acceptance can be made by:
-Writing “Acceptance” or equivalent words + signature on the first / second page of B/E.
-Composing a separate document
●Acceptance is unconditional.

Classification of Acceptance
Based on the amount of money accepted for payment
●Full acceptance
●Partial acceptance
Based on the party who accept
●Trade acceptance
●Banker’s acceptance

1.5. B/E Endorsement

●B/E endorsement is a procedure showing that B/E has been passed from this beneficiary to another.
Classification
●Blank endorsement
●To order endorsement
●Restrictive endorsement
●Without recourse endorsement

1.6. B/E Guarantee / Aval

●Guarantee is a commitment from a third party to make payment to the beneficiary if the payer fails to perform or perform insufficiently his/her duties when the B/E is due.
Guarantee can be made by:
●writing the word “guarantee” together with signature on the 1st or 2nd page of the B/E.
●Separate paper (confidential)

1.6. B/E Guarantee / Aval

●What if the guarantee does not mentioned the Guaranteed?
 Guarantee for the Drawer
●Can the Guarantor be the Drawer or Drawee?
 None, both are not allowed to sign as the Guarantor.
Đang tải…

1.7. B/E Protest

●B/E Protest is a document issued by the beneficiary within 2 days after B/E’s due date and sent to the drawee and other relevant parties, announcing that payment has not been made.

1.8. B/E Discount

●The Seller or Beneficiary transfer B/E which is not due to the bank in exchange for a sum of money lower than that stipulated in the B/E.

1.9. B/E Classification

●Based on the terms of payment
●Based on whether the documents are included or not
●Based on B/E’s negotiability
●Based on the kinds of drawers

Classification of B/E
1. Based on the terms of payment
- (At) sight draft: B/E that is payable as soon as it is shown to the drawee.
- Usance / Time / Term draft: B/E that is payable at a specified time after it is written.
2. Based on whether the documents are included or not
- Clean draft
- Documentary draft

Classification of B/E
3. Based on B/E’s negotiability
- Nominated / Nominal draft:“Pay to Mr. X” (rarely used)
- Order draft: “At … sight of this first bill of exchange pay to the order of <name of bank> the sum of …”
- Bearer draft / bill
+ “At … sight of this first bill of exchange pay to … (blank)” / “At … sight of this first bill of exchange pay to the order of … (blank)”
+ Blank endorsement / Order endorsement in blank

Classification of B/E
4. Based on the kinds of drawers
- Commercial bill / Trade bill: a B/E used in the buying and selling goods.
- Bank bill: a B/E given by a bank and instructing another bank to pay money to someone.

2. Promissory Note
●A buyer's written promise to repay a loan within specific time
●Not commonly used in International Trade

Main content of Promissory Note

•Title
•Reference No.
•Amount of money
•Place of drawing
•Date of drawing
•Time of payment
•Beneficiary
•Place of payment
•Drawer

●Definition
●Parties involved
●Features
●Content
●Validity and Presentation
●Classification
3. Cheque / Check

3.1. Definition
●A cheque is a written authorization to pay or order money from an account to the payee.
●Cheques are issued by financial institutions such as Banks, Building and Saving Societies, Post Offices etc

3.1. Definition
●Law governing:
- Uniform Law on Cheque– Geneve Convention 1931 (ULC 1931)
- Law on Negotiable instruments - Luật các công cụ chuyển nhượng Việt Nam 2005.

3.2. Parties involved

●Drawer: buyer, account holder, debtor, ...
●Drawee: bank
●Beneficary

Cheque circulation (1 bank)

Beneficiary / Payee (Seller)
Drawee (Bank)
Drawer
(Buyer)
Goods + Docs
Cheque
Presentation
Credit note
Debit note

Cheque circulation (2 banks)

Beneficiary / Payee (Seller)
Remitting Bank (Seller’s Bank)
Drawer
(Buyer)
Goods + Docs
Cheque
Presentation for collection
Credit note
Drawee (Buyer’s Bank)
Credit note
Collecting
Debit note

3.3. Features
●Abstraction
●Obligatory payment
●Circulation

3.4. Content
●Title “Check / Cheque”
●Date of issuance
●Place of issuance
●Drawee
●Drawer’s account
●Request for unconditional payment
●Beneficiary
●Drawer’s name and signature

3.5. Validity and Presentation time

●Validity time: Calculated from the time of issuance and stipulated clearly.
●Presentation time (from the date of issue)
-8 days: if payable within country of issuance
-20 days: if place of issue and place of payment are in the same continent.
-70 days: if place of issue and place of payment are not in the same continent.
(Article 29, ULC 1931)

3.6. Cheque classification

Based on Circulation
●Nominated / nominal cheque: Beneficiary’s name specified  non-negotiable, cannot be endorsed
●Nameless / Bearer check: No beneficiary specified – Pay to holder
●Order check / Check to order: - Pay to the order of …  can be negotiable by endorsement

3.6. Cheque classification

Based on usage
●Crossed check: crossed by the Drawer / Transferer  can be transferred through banks but cannot be used to withdraw cash.
+ Check crossed generally / General crossed cheque
 + Check crossed specially / Special crossed check: Name of the bank is specified in the cross.
●Traveller’s check
●Certified check

4. Payment Card
●History of payment card (textbook)
●Definition
●Technical description
●Parties involved
●Process of payment card circulation (textbook)
●Classification
●Benefits of payment cards (textbook)

4.2. Definition
●Payment cards: means of payment issued by banks or financial institutions so that card holders can withdraw, top up, make payments or remittance.

4.3. Technical description

●Size: 96mm x 54mm x 0.76mm
●Surface: information of bank, logo, serial number, validity and expiry date, card owner.
●Back: magnetic stripe storing information about the account, timing, PIN (Personal Identification Number), ...

4.4. Parties involved

●Card Association
●Card issuing bank
●Acquirer (Payment bank)
●Merchant
●Card holder

4.6. Classification
●Based on region
-Domestic cards
-International cards
●Based on issuing organization
-Cards issued by bank
-Cards issued by non-banking institution

4.6. Classification
●Based on card features
-ATM card
-Debit card
-Credit card

4.7. Benefits
●For card holders
●For banks
●For merchants
●For the society
Chapter 3
MODES OF PAYMENT

In this chapter
1.Remittance
2.Open account
3.Collection
4.Cash against documents (CAD)
5.Documentary Credit (Chapter 5)

1. Remittance
●Definition
●Parties involved
●Classifications
●Remittance procedure
●Outward and inward remittance in commercial bank
●When to use?
1.1. Remittance
●An arrangement whereby buyer requests his bank to remit a fund to the account at seller's bank.

1.2. Parties involved

●Remitter / Applicant / Customer (Importer)
●Remitting Bank / Applicant Bank
●Beneficiary (Exporter)
●Beneficiary Bank
●Corresponding Bank / Agent Bank

1.3. Classification
Based on Forms of Remittance
●M/T: Mail transfer
●T/T: Telegraphic transfer
Based on Purposes of Remittance
●Trade remittance
●Non-trade remittance
●Remittance for Investment
●Others: FOREX Trading, Loan settlement ...

1.3. Classification
Based on Time of Payment
●Payment in advance
●Payment at sight
●Payment after shipment
 Risk???
 Remittance

Advantages

- Fastest method
- Simple Procedure
- Low fees

Disadvantages

- No conditions and connections between taking delivery of goods and payment 

risky for seller/buyer

1.4. Remittance Procedures

●Remitting Bank and Beneficiary Bank maintain foreign account relations
●Remitting Bank and Beneficiary Bank DO NOT maintain foreign account relations

1.4. Remittance Procedures

Questions: Procedures for:
●Payment at sight?
●Payment in advance?

1.5. Outward and inward remittance in commercial bank

●Outward remittance
●Inward remittance

1.5.1. Outward Remittance

1.Receiving Money Order applications and documents
2.Examining Money Order applications and documents
3.Remittance by SWIFT (Society for Worldwide Interbank and Financial Telecommunication)
4.Filing

1.5.2. Inward Remittance

Beneficiary Bank will:
●Receive Money order through SWIFT
●Make payment to Beneficiary
●Filing

1.6. When to use?

●Small payment (e.g. fees...)
●High degree of Trust

2. Open Account
●Definition
●Parties involved
●Procedures
●Classification
●When to use?

2.1. Definition
●An arrangement whereby the goods are manufactured and delivered before payment is required.

2.2. Parties Involved

●Remitter / Applicant / Customer
●Remitting Bank / Applicant Bank
●Beneficiary
●Beneficiary Bank
●Corresponding Agent Bank

2.4. Classification: Kinds of Open Account Facilities

- Based on guarantee of solvency
+ Open account to be secured (by export credit insurance / by a payment guarantee)
+ Open account to be naked
- Based on how to pay when due
+ Open account by collection
+ Open account by remittance

2.5. When to use?

●Internal use
●High degree of TRUST

3. Collection
●Overview
●Procedures
●Collection operation at commercial banks
●When to use?
3.1. Overview
●Law governing
●Definition
●Parties involved
●Classification

3.1.1. Law Governing

The Uniform Rues for Collection – URC (ICC)
●1956: issuance
●1967: revision
●1978: revision (URC No. 322)
●1995: revision (URC No. 522)
3.1.2. Definition
"Collection" means the handling by banks of documents as defined in sub-Article 2(b), in accordance with instructions received, in order to:
1 obtain payment and/or acceptance, or
2 deliver documents against payment and/or against acceptance, or
3 deliver documents on other terms and conditions.
(Article 2a – URC 522)

3.1.2. Definition
“Documents" means financial documents and/or commercial documents:
1. "Financial documents" means bills of exchange, promissory notes, cheques, or other similar instruments used for obtaining the payment of money;
2. "Commercial documents" means invoices, transport documents, documents of title or other similar documents, or any other documents whatsoever, not being financial documents.
(Article 2b, URC 522)

3.1.3. Parties involved

●Principal (exporter): party entrusting the handling of a collection to a bank;
●Drawee (importer): the one to whom presentation is to be made in accordance with the collection instruction.
●Remitting bank (exporter’s bank): the bank to which the principal has entrusted the handling of a collection;
●Collecting bank (importer’s bank): any bank, other than the remitting bank, involved in processing the collection;
●Presenting bank: collecting bank making presentation to the drawee.

3.1.4. Classification
●Clean Collection
●Documentary Collection
-Documents against Payment (D/P)
-Documents against Acceptance (D/A)

3.2. Procedures
●Clean Collection
●Documentary Collection

3.2.1. Clean Collection

●"Clean collection" means collection of financial documents not accompanied by commercial documents.
(Article 2c, URC 522)

3.2.2. Documentary Collection

●An arrangement whereby the goods are shipped and the settlement of Bill of Exchange (Draft) is drawn by the seller on the buyer, and document(s) is sent to the seller’s bank with clear
instructions for collection through one of its correspondent bank located in the domicile of the buyer.

3.2.2. Documentary Collection

"Documentary collection" means collection of:
1. Financial documents accompanied by commercial documents;
2. Commercial documents not accompanied by financialdocuments.
(Article 2d, URC 522)

3.3. Collection operation at commercial banks

●Remitting bank
●Collecting bank

3.3.1. Remitting bank

●Receiving Documents for Collection
●Checking Documents (Application + Docs)
●Processing Documents (issuing Collection order)
●Sending Documents and receiving feedback
●Informing results (payment and/or non-payment) to customers

3.3.2. Collecting bank

●Receiving and Checking Documents for collection from foreign bank.
●Informing customers
●Payment and/or non-payment
●Filinh

3.4. When to use?

●Clean collection: High degree of Trust and / or used for Goods of low value
●Documentary collection: High degree of Trust

4. Cash Against Documents (CAD)

●Definition
●Parties involved
●Procedures
●When to use?

4.1. Definition
●A mode of payment in which the importer, based on sale contract, requests the exporter’s bank to open a Trust account for payment settlement when the exporter presents the documents as
agreed.

4.2. Parties involved

●Buyer
●Seller / Beneficiary
●Seller’s Bank / Beneficiary’s Bank

4.4. When to use?

●Importer has a representative office at the exporter’s country.
●Goods are rare or only supplied by a supplier.

Chapter 4
DOCUMENTARY CREDIT
Đang tải…
In this chapter
1.General introduction
2.Procedure
3.Letter of credit (L/C)
4.Documentary credit operation at commercial banks (textbook)
5.Document examination (textbook)

1. General introduction
●Legal foundation
●Definition
●Features
●Parties involved

1.1. Legal foundation

●UCP (Uniform Customs and practice for documentary credits) No. 600
●URR (Uniform rules for bank to bank reimbursements under documentary credits) No 725
●e - UCP (The Supplement to the Uniform Customs and Practice for Documentary Credits for Electronic Presentation)
●ISBP - 681 (International Standard Banking Practice for examination of documents under documentary credits)
●Others

The Uniform Customs and Practice for Documentary Credits

●Published by International Chamber of Commerce (ICC) in 1933
●Governs the operation of the Letter of Credit (L/C) in the Documentary Credit mode of payment
●Purpose: lighten the confusion caused by individual countries in promoting their own national rules on L/C practice

UCP 600
●Full name: Uniform Customs and Practice for Documentary Credits ICC, 2007 Revision, No 600.
●Latest version applied in Documentary Credit
●Consists of 39 articles

1.2. Definitions
●“Credits means any arrangement, however named or described, that is irrevocable, and thereby constitues a definite undertaking of the issuing bank to honour a complying presentation.”
(Article 2 – UCP 600)

1.2. Definitions
●A documentary credit is the written promise of a bank, undertaken on behalf of a buyer, to pay a seller the amount specified in the credit provided the seller complies with the terms and
conditions set forth in the credit. The terms and conditions of a documentary credit revolve around two issues: (1) the presentation of documents that evidence title to goods shipped by the seller,
and (2) payment.
(Edward G. Hinkelman, A short course in International Payment)

1.2. Definitions
Documentary credit is an agreement, in which a Bank (Issuing Bank), based on the requirements of a client (applicant), pay a specified sum of money to another person (beneficiary) or accept his
B/E within specified amount, as long as he presents a set of documents complying with L/C’s requirements.

1.2. Definitions
●Banking day: a day on which a bank is regularly open at the place at which an act subject to these rules is to be performed.
●Presentation: either the delivery of documents under a credit to the issuing bank or nominated bank or the documents so delivered.
●Complying presentation: a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of these rules and international standard banking practice
(ISBP).

1.2. Definitions
●Honour means:
a. To pay at sight if the credit is available by sight payment.
b. to incur a deferred payment undertaking and pay at maturity if the credit is available by deferred payment.
c. to accept a bill of exchange ("draft") drawn by the beneficiary and pay at maturity if the credit is available by acceptance.
●Negotiation: the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to
advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.

Features:Relations between parties

Exporter / Seller
Issuing Bank
Importer / Buyer
Sales Contract
Letter of Credit (L/C)
L/C Application

1.3. Features
●L/C is a contract between 2 parties (Issuing bank and Beneficiary).
●L/C is independent from sales contract.
●L/C only deals on documents and payment shall only be made based on documents.
●L/C requires strict documents compliance.
●L/C – a safe method of payment?

1.4. Parties involved

●Applicant: the party on whose request the credit is issued.
●Beneficiary: the party in whose favour a credit is issued.
●Issuing Bank: the bank that issues a credit at the request of an applicant or on its ownbehalf.
●Advising Bank: the bank that advises the credit at the request of the issuing bank.

1.4. Parties involved

●Confirming Bank: bank that adds its confirmation to a credit upon the issuing bank's authorization or request.
●Nominated Bank: bank with which the credit is available or anybank in the case of a credit available with any bank.
●Paying Bank
●Negotiating Bank
●Accepting Bank
●Reimbursing Bank
●Transfering Bank
2. Procedure
●L/C issuance
●L/C payment

2.2. L/C payment

●Sight payment
●Negotiation
●Usance L/C

2.2.1. Sight payment

●Payment available at Issuing Bank
●Payment available at Nominated Bank for payment

Advising Bank
●Checking compliance of documents: (2-3 days)
- Unity
- Completion
- Honesty
•Non-discrepant documents
•Discrepant documents

Issuing Bank
●Checking compliance of documents (5 working days)
•Non-discrepant documents: make payment
•Discrepant documents: refuse to honor / negotiate (Article 16 UCP 600)
●Transfer docs to Importer and receive payment

2.2. Negotiation
●Negotiation: the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to
advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.
(Article 2, UCP 600)
●“AVAILABLE WITH ...<BANK>... BY NEGOTIATION”

3. LETTER OF CREDIT
●Definition
●Importance
●Content
●Amendment
●Classification

3.1. Definition
●L/C is a document issued by Issuing Bank under the Applicant’s request, acting as an undertaking of payment to the Beneficiary within a specified amount of time when the Beneficiary fulfils
correctly and sufficiently the terms stipulated in such document.

3.2. Importance
●L/C is the major means of Documentary Credit.
●L/C is issued based on International sales contract, but then is independent of such contract.
●L/C governs activities of relevant parties: Applicant, Issuing Bank, Beneficiary, Advising Bank, Paying Bank,...
●L/C is used to compare and adjust the details in International sales contract (if any).
●L/C can be considered as the Sales contract if such one is unavailable

3.3. Content
1. L/C Number (Field 20)
2. Issuing place
3. Date of issue (Field 31C)
4. Date and place of expiry (Field 31D)
-Place of expiry: exporter’s / importer’s / third party’s country.
-Date of expiry:
Date of issuance----- Delivery -----Date of expiry
5. Forms of L/C (Field 40A)

L/C’s validity
Date of shipment

UCP 600 - Article 30 Tolerance in Credit Amount, Quantity and Unit Prices
a. The words "about" or "approximately" used in connection with the amount of the credit or the quantity or the unit price stated in the credit are to be construed as allowing a tolerance not to
exceed 10% more or 10% less than the amount, the quantity or the unit price to which they refer.
b. A tolerance not to exceed 5% more or 5% less than the quantity of the goods is allowed, provided the credit does not state the quantity in terms of a stipulated number of packing units or
individual items and the total amount of the drawings does not exceed the amount of the credit.

UCP 600 - Article 30 Tolerance in Credit Amount, Quantity and Unit Prices
c. Even when partial shipments are not allowed, a tolerance not to exceed 5% less than the amount of the credit is allowed, provided that the quantity of the goods, if stated in the credit, is
shipped in full and a unit price, if stated in the credit, is not reduced or that sub-article 30 (b) is not applicable. This tolerance does not apply when the credit stipulates a specific tolerance or uses
the expressions referred to in sub-article 30 (a).

Date of shipment
Sea transportation:
-“The date of issuance of the transport document will be deemed to be the date of dispatch, taking in charge or shipped onboard, and the date of shipment. However, if the transport document
indicates, by stamp or notation, a date of dispatch, taking in charge or shipped onboard, this date will be deemed to be the date of shipment.” (UCP 600 Article 19. a.ii)
-A bank will only accept a clean transport document. A clean transport document is one bearing no clause or notation expressly declaring a defective condition of the goods or theirpackaging.
The word "clean" need not appear on a transport document, even if a credit has a requirement for that transport document to be "clean on board". (UCP 600 Article 27)

Date of shipment
Air, Road, Rail and Inland waterway transport
●Date of shipment = Date of issuance of transport document (except the case the date of shipment is stipulated on the document)
(Article 23, 24 UCP 600)

3.3. Content
11. Partial shipment: (Field 43P)
Shipment on more than one means of conveyance within the same mode of transport will be regarded as covering a partial shipment, even if the means of conveyance leave on the same day for
the same destination. (UCP 600 Article 31)
If partial shipment is not allowed, L/C should state: “Partial shipment: not permitted / prohibited / not allowed”

3.3. Content
12. Transhipment: (Field 43T)
UCP 600, Article 19:
b. Transhipment means unloading from one means of conveyance and reloading to another means of conveyance (whether or not in different modes of transport) during the carriage from the
place of dispatch, taking in charge or shipment to the place of final destination stated in the credit.
c. i. A transport document may indicate that the goods will or may be transhipped provided that the entire carriage is covered by one and the same transport document.
ii. A transport document indicating that transhipment will or may take place is acceptable, even if the credit prohibits transhipment

3.3. Content
13. Description of Good / Services: (Field 45A) commodity, specification, quantity, price, packaging and marking, ...
14. Transportation terms: Incoterms, place of shipment, mode of transport, ...
15. Documents required: (Field 46A) Documents relating to commodity, mode of transport, payment and legal framework.
16. Commitment of payment from Issuing bank (Field 78)
17. Additional conditions: (Field 47A)
18. Signature of issuing bank: L/C issued by mail / telex.

3.4. Amendment
●Amendment of L/C: modification, correction or cancelation of some L/C terms and conditions.
●Including:
-Increase or decrease in L/C’s value
-Changes in latest shipment date, L/C’s expiry date
-Increase or decrease in amount of goods
-Modification of TTR and Reimbursing bank
-Modification of Confirmed L/C and Confirming Bank
● Amendment should take place before shipment date and within L/C’s validity time.
●Article 9, 10 UCP 600.

UCP 600 - Article 10 - Amendments

a. Except as otherwise provided by article 38, a credit can neither be amended nor cancelled without the agreement of the issuing bank, the confirming bank, if any, and the beneficiary.
b. An issuing bank is irrevocably boundby an amendment as of the time it issues the amendment. A confirming bank may extend its confirmation to an amendment and will be irrevocably bound
as of the time it advises the amendment. A confirming bank may, however, choose to advise an amendment without extending its confirmation and, if so, it must inform the issuing bank
withoutdelay and inform the beneficiary in its advice

UCP 600 - Article 10 - Amendments

c. The terms and conditions of the original credit (or a credit incorporating previously accepted amendment s) will remain inforce for the beneficiary until the beneficiary communicates its
acceptance of the amendment to the bank that advised such amendment. The beneficiary should give notification of acceptance or rejection of an amendment. If the beneficiary fails togive such
notification, apresentation that complies with the credit and to any not yet accepted amendment willbedeemed tobe notification of acceptance by the beneficiary of such amendment.As of that
moment the credit will be amended.
d.A bank that advises an amendment should inform the bank from which it received the amendment of any notification of acceptance or rejection.

UCP 600 - Article 10 - Amendments

e. Partial acceptance of an amendment is not allowed and willbe deemed to be notification of rejection of the amendment.
f. A provision in an amendment to the effect that the amendment shallenter into force unless rejected by the beneficiary within a certain time shallbe disregarded.

3.5. Classification
●Based on Revocability
●Based on Payment time
●Based on Uses

3.5.1. Based on Revocability

●Revocable L/C
●Irrevocable L/C
“A credit is irrevocable even if there is no indication to thateffect.” (Article 3 – UCP 600)
●Confirmed Irrevocable L/C
●Irrevocable without recourse L/C

3.5.2. Based on Payment time

●Sight L/C
●Deferred / Acceptance L/C
●Mixed L/C

3.5.3. Based on Uses

●Revolving L/C
 Automatically regain value and can be used in a specific time (used for partial payment / delivery)
+ Non-cumulative revolving L/C
+ Cumulative revolving L/C
+ Auto-revolving L/C
+ Revolving by amendment
+ Semi-auto revolving L/C

3.5.3. Based on Uses

●Back-to-back L/C
 Exporter use the L/C issued to open another L/C for the beneficiary of someone else (for intermediary use)
+ Master L/C (Backing L/C)
+ Back-to-back / Counter / Subsidiary L/C

3.5.3. Based on Uses

●Reciprocal L/C
 This L/C only comes into effect when its reciprocal L/C has been opened (used in barter transaction / processing goods for export)
●Standby L/C
 issued by Exporter’s Bank to guarantee reimbursement of deposit and other costs in case the Exporter fails to deliver the goods.

3.5.3. Based on Uses

●Red clause / Advance clause / Special clause / Anticipatory L/C
 This kind of L/C allow Beneficiary to receive an amount of money in advance. The Beneficiary, before x days of delivery, can draw a B/E to the Issuing Bank, together with L/G (Letter of
Guarantee) from a bank, a standby L/C, or a promissory note signed by a bank.

3.5.3. Based on Uses

●T/TR (Telegraphic Transfer Reimbursement) L/C
●Irrevocable Transferable L/C