1. DOCUMENTARY CREDIT: A letter of credit issued by a documentary bill of exchange or by document alone. Most of the letters of credit used in international trade settlement are documentary letters of credit.
2. Light ticket L/C: A letter of credit for payment by a bill of exchange without a document.
3. Revocable (REVOCABLE) Letter of Credit: refers to the letter of credit issued by the issuing bank to the opened letter of credit without the consent of the beneficiary.
4. Irrevocable (IRREVOCABLE) Letter of Credit: means that the letter of credit can not be unilaterally modified or revoked within the validity period without the consent of the relevant parties to the letter of credit. Such letters of credit are used more in international trade.
5. Confiscation (CONFIRMED) Letter of Credit: refers to a letter of credit confirmed by another bank other than the issuing bank. The confirmed letter of credit is mainly that the beneficiary (exporter) does not understand the creditworthiness of the issuing bank, and is too worried about the national political bureau and foreign exchange control of the issuing bank, and is afraid of not receiving the payment and requesting the confirmation, so that the payment is made. The recycling has been double guaranteed.
6. Letter of sight at sight: A letter of credit that fulfills the payment obligation immediately after the issuing bank or the payment bank receives the bill of exchange and the documents that meet the terms of the letter of credit.
7. Forward letter of credit: When the issuing bank or the payment bank receives the documents in conformity with the letter of credit, it does not pay immediately, but waits until the bill of exchange expires to fulfill the payment obligation.
RED CLAUSE Letter of Credit: A letter of credit that allows the exporter to withdraw all or part of the purchase price before the goods are delivered. The issuing bank adds the above terms to the letter of credit, usually in red letters, so the letter of credit is called the "red clause letter of credit".
9. PAYMENT, ACCEPTING, NEGOTIATING Letter of Credit: A letter of credit should indicate that the method of settlement is to use the amount of the letter of credit using spot or deferred payment, condition or negotiation.
X. Transferable (TRANSFERABLE) Letter of Credit: means that the issuing bank authorizes the issuing bank to transfer all or part of the letter of credit to the third party, that is, the letter of credit of the second beneficiary, at the request of the beneficiary. The transferable letter of credit can only be transferred once. After the transfer of the letter of credit, the second beneficiary will deliver the goods, but the beneficiary of the original certificate, that is, the former beneficiary, is still responsible for the seller’s responsibility in the sale and purchase contract. If the letter of credit allows for repackaging, the letter of credit can be transferred to several second beneficiaries separately, and such transfer can be considered as a transfer. A non-transferable letter of credit is a letter of credit in which the beneficiary cannot transfer the rights of the letter of credit to another person.
å一. Back-to-back (BACK-TO-BACK) Letter of Credit: It is the beneficiary requesting the notice bank to open a new letter of credit on the basis of the original letter of credit. When the two countries cannot directly trade, they will conduct it through a third party. trading. Back-to-back letters of credit and convertible letters of credit are generated in intermediate transactions, facilitating intermediate traders. An intermediary trader sells a certain commodity to a foreign importer, asks the importer to open a previous letter of credit in favor of him, and then purchases the same goods from the actual supplier of the local or third country, and The previous letter of credit is used as a guarantee, and the issuing bank or other bank is requested to open a second letter of credit to the local or third supplier, and the seller (intermediary) as the applicant for the second letter of credit. Regardless of whether he is able to obtain payment under the previous letter of credit, he is responsible for repaying the bank’s payment under the second letter of credit.
12. Letter of Credit: The two parties are the importer and exporter of each other, and they are the applicants and beneficiaries of the letter of credit. In order to achieve a balance between the payment of the two parties, the use of mutual opening of letters of credit to link exports and imports. The beneficiary of the former letter of credit is the applicant for the second letter of credit (also known as the return certificate); the applicant for the certificate of the former letter of credit is the beneficiary of the card. The notice bank of the former letter of credit is often the issuing bank of the return certificate, and the amount of the two certificates is approximately equal.
13. REVOLVING L/C: A letter of credit that can be re-used multiple times in a revolving letter of credit. When the amount of the letter of credit is used in whole or in part, it is restored to the original amount. The buyer and the seller enter into a long-term contract and deliver the goods in batches. The importer can open a revolving letter of credit in order to save the issuing procedures and expenses. Revolving letters of credit can be divided into two types of letters of credit that are cycled by time and letters of credit that are cyclical by amount.
14. Partial credit part collection: A transaction contract may sometimes include two different payment methods, such as partial credit method and partial collection method. That is, if part of the payment, 80% of the goods are opened by the importer, the remaining 20% ​​will be issued by the exporting party after the goods are shipped, together with the shipping documents under the letter of credit, and the negotiating bank entrusting the letter of credit to the issuing bank. Importer collection. For the partial payment of the L/C and the collection of the part of the payment, the draft shall be opened separately. The full set of shipping documents shall be attached to the draft under the letter of credit, and the collection shall be a light ticket.