To put it simply,Usance letter of creditEspecially for new clients。
What are the main risks？
How to avoid risks？
Long-term credit risk: mainly the insolvency of issuing bank。
Ways to protect against this risk:
First, well-known banks with larger requirements for issuing banks。
Find another bank for confirmation。Credit cards are generally safer after they are confirmed。
Usance letter of credit for foreign trade enterprisesRisk prevention and control strategy。
Markets in Europe, America and Japan are far away。In the face of the "Belt and Road" market, foreign trade enterprises should fully grasp the risk of long-term letter of credit。Nowadays, international trade is developing faster and faster, and international settlement is becoming more and more frequent。
With the development of international trade and the frequent participation of banks in international trade settlement, the payment of L/C has, to a large extent, solved the problem of the import and export parties gradually becoming the main settlement method of international trade in the process of payment and transaction。
In addition, long-term letters of credit are widely used by traders because of their financing characteristics。However, everything has two sides。When L/C settlement brings convenience to the parties, it also brings some risks due to the complicated relationship and specific operation process and characteristics of the parties。
In order to investigate the importer's credit, the issuing bank's credit and the carrier's credit in international trade, the exporter must improve the quality of the salespeople themselves and must strictly examine the letter of credit issued by the importer。If the contents of the letter of credit are found to be unacceptable or unachievable, the importer must be immediately contacted for modification。In order to eliminate the potential risks at the time of invoicing, the invoicer must be required to examine the letter of credit strictly。
In order to prevent the expiration of the letter of credit, exporters must submit documents in advance and urge the sending bank to review the documents as soon as possible to shorten the time. Exporters must master the basic knowledge of the letter of credit and the operation process of common sense, correctly understand the requirements of the terms of the letter of credit, and pay attention to the logical relationship of document inquiry。The documents submitted are single and consistent, and the documents are consistent to ensure safe remittance。
Finally, in order to reduce losses to a greater extent and ensure the collection of foreign exchange, exporters can take out insurance with the China Export Credit Insurance Corporation。
China Credit Insurance covers national risks (national remittance control, government expropriation, nationalization and war, etc.) and buyer risks (delinquency of payment, refusal of payment, bankruptcy and credit opening risks, etc.), and provides foreign trade enterprises with rapid and perfect services in export financing, information consulting, and accounts receivable management
For Sinosure, this is a policy business, supported by the state's financial support, the principle of capital preservation, not for profit。Therefore, for exporters, under the premise of paying less insurance premiums, a variety of foreign exchange collection risks can be avoided, which is a good way to avoid risks in the current complex and changeable international trade。
Therefore, in order to prevent the loss caused by the long-term L/C settlement risk of exporters, the following points should be done:
(1) When settling usance letter of credit, exporters should first avoid choosing traders from countries and regions with frequent occurrence and political instability, and conduct detailed credit investigation on customers in advance。
In addition, in order to avoid possible risks, exporters can fully understand the situation of importers through business information services, credit insurance companies, relevant banks, chambers of commerce, etc。
Be especially careful with new businesses, new products, and new customers。To avoid the risk of having funds and documents frozen or withheld by foreign governments or organizations, you should not buy or sell in partnership with entities and individuals subject to international sanctions。
After receiving the L/C issued by the importer, please do not ship the goods until you are sure of the authenticity of the L/C。
To prevent goods and other order situations，For example, the ship arrives at the port of destination，But the invoice was delayed in discharging the ship，Incurs huge port incidentals，The importer and exporter can directly mail 1/3 of the original invoice of the credit certificate to the importer through negotiation，However, in the credit certificate, the importer must return all three original invoices to the bank
(2) In order to prevent the risk caused by bad bank credit, the exporter must require the importer to issue a letter of credit with a world-class, large and reputable international bank and a bank approved by the exporter when signing a contract with the importer。If the importer insists on issuing a letter of credit in a bank with relatively poor credit for its own reasons, in order to avoid the potential risks brought by credit, the exporter can ask another bank with good credit to guarantee the letter of credit, so that the collection of the payment will have double protection。
(3) For NVOCs, exporters should pay attention to the confirmation and investigation of the qualification of the carrier, especially for international trade where the trade term is FOB。
The first thing to check is whether the declaration is made with the Chinese Ministry of Transport。An undeclared NVOCC may request a bill of lading from the issuing shipping company。
Secondly, we can verify whether the international freight forwarding company is registered in the international freight forwarding Enterprise Information management system of the Ministry of Commerce of China。In order to achieve the original bill of lading issued by the bank against a letter of credit after the arrival of the goods at the port of destination, we may require the NVOCC or freight forwarder to issue a guarantee, otherwise we will be liable for shipping the goods without a document。
Finally, we should pay close attention to the movement of the goods and track the goods。
(4) In order to receive payment smoothly and prevent the importer from refusing to pay, the exporter shall correct it by itself。Importers need to strictly review the delivery order, eliminate potential risks in the delivery order, advance certification audit, and discover the soft terms of the letter of credit as soon as possible。
If the terms of the letter of credit are unacceptable or cannot be satisfied, the importer should be contacted in time to request modification。To avoid the dilemma of expiry of an undelivered credit, exporters should pay attention to the latest presentation and validity period of the credit。
The export document personnel must be familiar with UCP600 on the basis of mastering the basic knowledge and operation process of the letter of credit, and carefully formulate the order to ensure that the order is consistent and the order is consistent to achieve the purpose of safe payment。