|International Business Credit Management Articles
Examples for L/C Terms and Conditions
From time to time, U.S. companies that export will opt to ship only against a letter of credit. In this situation, it is important to tell your foreign buyer what terms are acceptable in the L.C. This should be done before the buyer arranges for the L.C. to be issued. Your instructions to the customer should follow the following pattern:
Letter of Credit Instructions
In connection with your planned purchase, the following terms and conditions should be included in your letter of credit. Please instruct your bank to issue this letter of credit subject to the Uniform Customs and Practices for Documentary Credits, International Chamber of Commerce Publication 500. If your bank is unable to issue the letter of credit based on the following instructions, please provide us with information about which items the issuing bank objects to, and why. Instruct the issuing bank not to issue the letter of credit until these differences have been worked out. This will eliminate additional and unnecessary costs to your company associated with amending the letter of credit after it has been issued.
Please note: We will not initiate shipment until the confirmed letter of credit is received but it may expedite processing if you will fax a copy of the letter of credit to [name] at [fax number]. This must be a copy of your bank's actual SWIFT message sent to the confirming bank.
* One note of caution: It is important for the exporting company to check with the export letter of credit department of its bank to make certain that the terms and conditions included in its instructions are appropriate for the country into which the seller/exporter plans to export its products.
Source: "Credit and Collection Handbook". Disclaimer: The information contained in this publication is not legal advice, and is not a substitute for legal advice. Readers are encouraged research issues carefully, and to contact an attorney in their State to clarify any issues raised after reading any of the articles in this publication.