Comments on: Confirming quality when paying by irrevocable letter of credit

By: Managing independent quality control

Managing independent quality control — Thu, 05 Jan 2012 02:51:35 +0000

[...] only after quality is confirmed. For more details, read this article if you pay by bank wire, and this one if you pay by letter of [...]

By: How a letter of credit protects importers

How a letter of credit protects importers — Fri, 16 Dec 2011 14:37:22 +0000

[...] Renaud Anjoran on 16 December 2011 As I explained before in Confirming quality when paying by irrevocable letter of credit, an importer can pay his suppliers through letters of credit (L/C). An L/C triggers the payment [...]

By: Renaud Anjoran

Renaud Anjoran — Fri, 13 Aug 2010 07:41:38 +0000

Hi Werner,
You are right, some banks don’t suggest “standard” clauses, and inexperienced buyers don’t understand the process, which leads to such cases. Ouch…

By: Werner

Werner — Fri, 13 Aug 2010 07:32:11 +0000

Excellent post! It’s amazing how many misconceptions still exist about how L/C work. Was contacted yesterday by a client who’s out of 65000 USD b/c he had neglected to specify a quality control certificate and got shipped a container of junk…but with all documents specified in the L/C present. He didn’t know that the bank only deals with documents, not with quality.

By: How to deal with production problems in China

How to deal with production problems in China — Sat, 07 Aug 2010 12:07:47 +0000

[...] the payment until the quality of final products and the production status are verified. Paying by LC is safer with new [...]

By: How to control a Chinese supplier?

How to control a Chinese supplier? — Sun, 18 Jul 2010 06:03:46 +0000

[...] To know more about this topic, you should read Paying by bank wire (T/T) and Paying by letter of credit (L/C) [...]

By: Renaud Anjoran

Renaud Anjoran — Thu, 01 Jul 2010 15:11:01 +0000

Hi Lora,
Usually it costs the buyer between 200 and 800 USD, from the top of my mind. Of course it depends on the amount of the purchase.
For the exporter I have no idea. They can get some cash advance, but I don’t know what interest rate is charged to them in that case.

By: Lora Brady

Lora Brady — Thu, 01 Jul 2010 15:02:16 +0000

Is there a rule of thumb on how much an L/C cost? What kind o interest reates do banks charge for a cash advance on L/Cs. I have issued a TT to a vendor in China for a hard goods prototype. I paid about US $40.00 I believe.