Description
Overview
This assignment will focus on the letter of credit, a key banking document. Based on the sample provided and the information about YOUR COMPANY, you will complete portions of this banking document for an export sale by YOUR COMPANY.
Letter of Credit
The letter of credit is the key banking document. It is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. There are several types of letters of credit. The key information on them are usually similar and is provided below.
Instructions
Download this BLANK Trade Doc 3 – Letter of Credit Download BLANK Trade Doc 3 – Letter of Credit. Add your last name to the file and save it. (Example: Trade Doc 3 – Jim Kerlin)
Use this EXAMPLE Trade Doc 3 – Letter of Credit Download EXAMPLE Trade Doc 3 – Letter of Creditprovided to see what information goes in the blanks.
Add the specified info (highlighted in yellow below) for an export sale by YOUR COMPANY. Use the shipping and banking information you collected for your GM-Challenge 2 and 3 as well as info underlined as indicated.
Type your information in the BLANK document, add your name to the file and save it. (Example: Trade Doc 3 – Jim Kerlin) Alternately, the version you submit may be handwritten but it should be legible.
Key Information on a Letter of Credit
Advising Bank – name and address of the seller’s bank and their SWIFT #number; it is at the top of bank letterhead paper (use the US domestic bank from GM-Challenge 3)
2. Amount – payment that is supposed to be transferred by the bank to the seller (use 50,000 USD)
3. Beneficiary – name and address of the seller (use YOUR COMPANY’s info)
4. Applicant – name and address of the buyer that requested the letter of credit (use the foreign buyer’s info)
5. Issuing Bank – name and address of the bank issuing the letter of credit at the request of the buyer (use the foreign bank from GM-Challenge 3)
6. Advice Date – date the countdown starts toward the expiration date (use Mar 1, 2024)
7. Expiration Date – date by which the beneficiary must submit the necessary paperwork in order to receive payment (use Jun 15, 2024)
8. Terms and Conditions – the requirements the beneficiary must follow in order to be paid (use ports selected for GM – Challenge 2; and, latest shipping date of Apr 1, 2024)
9. Required Documentation – the exact documentation that the beneficiary must provide to the issuing bank in order to receive payment (use 1 original and 3 copies of the commercial invoice; a full set of 3/3 ocean bills of lading; and, 2 copies of the packing list)
