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My Opera will be shut down as of March 1, 2014. Again I must find another home for my blog. I am trying to export my blog from My Opera to WordPress.

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2 Comments

  1. biofuelsupplier

    December 24, 2013 at 7:12 pm

    Dear Mr OLD MAN, I am an Expoter"Seller" from Ukraine who is new / NOVICE to the LC payment System. I have been dealing with / accepting T/T Payment for my goods, but now a days potential clients wants to Pay me Only by "100% L/C Irrevocable" so i am now trying to consider accepting this system of Payment now . Please i need your help in clarification on the word " To draw DRAFT " ( Is a DRAFT amongst the Required documents i need to present to my Ukraine BANK in order to get PAID from the L/C once i have made shipment of the Goods ??? ) what does this mean " to DRAW DRAFT " ?? I have studied some L/C sample and i have noted that some of the most common Required documents for collecting Payment on L/C are : (1) 3 Originals and 3 ADDITIONAL Copies of B/L Document. (2) Original of SGS inspection Certificate (3) 3 Originals of Seller's COMMERCIAL INVOICE. (4) Original of INSURANCE Certificate ( if CIF Shipment) Now, the Question is : (A) Do i need to DRAW a DRAFT " payment DRAFT" and Present to My Ukraine BANK together with the ABOVE Mentioned Documents for 100% Sight L/C ??? (B) Would i NOT get PAID if i only submit the Above Mentioned Documents Mentioned in the L/C to my Ukraine BANK without "Payment Draft" ??? (C) Is it MY Ukraine BANK that would have to PAY me the Money ??? Or, My Ukraine BANK's Duty is only just to Transfer the completed DOCUMENTS to the Buyer's Bank overseas and then Wait for the Buyer's Bank Overseas to send the Money "Payment" to My Ukraine BANK " My Bank Account" ??? Hello Friends/ Professionals, (D) if I can ask the Issuing Bank to make my UKRAINIAN Bank to be My Advising Bank , My Confirming Bank , and also my Negotiating Bank ??? (E) Can my Ukrainian Bank(Bank in Ukraine ) Negotiate Documents and Make Payment to me , and then call for T/T reimbursement from the Issuing Bank ??? (F) In order to guide myself from getting not paid due to Possible Discrepancies that might arise on the Requested documents (Since English is not main Language in Ukraine, so most times there could be Mis-spellings / Typo-Error of English words on required Documents ) , in this case, is it Possible that i request the Buyer to ask his Bank" Issuing Bank" to Mention condition in the L/C that, for Every Discrepancies found by NEGOCIATING BANK / ISSUING BANK in the Submitted documents a certain agreed Amount of $$$ Dollars should be Charged by the ISSUING BANK from my Proceeds " Funds" and then balance Payment Transferred to me (My Bank), rather than the L/C ISSUING BANK REJECTING my Documents (and asking me to re-send correct documents again ) due to Discrepancies ????? Please i need your Professional Answers. Regards,Oleg

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  2. mroldmanvcb

    December 24, 2013 at 11:12 pm

    Dear Oleg,1) DraftDraft is not a document required under Field 46A of SWIFT MT 700. – Draft is required in LC available by negotiation (negotiation LC) and LC available by acceptance (acceptance LC). LC available by (sight) payment or by deferred payment requires no draft.So, if the LC is available by negotiation with a nominated bank, say, your Ukraine Bank, you (the beneficiary) are required to present sight drafts together with the documents required under Field 46A to the nominated bank for negotiation (i.e., get advance payment). However, please note that unless the nominated bank the confirming bank, it may not agree to act on its nomination, i.e., not agree to negotiate the drafts and documents. So, if you want to receive payment when you present drafts and complying documents to your Ukraine Bank, you should request the applicant (buyer) to open a confirmed LC (which is confirmed by your Ukraine Bank). – TO DRAW DRAFT means TO ISSUE DRAFT.- As said, LC available by (sight) payment requires no draft. If the LC is available by payment with your Ukraine Bank which is also a confirming bank, you can get payment at sight once you present the complying documents (no draft) to your Ukraine Bank.- If the LC is available by negotiation with any bank or with your Ukraine Bank and your Ukraine Bank is not a confirming bank, it may not agree to negotiate the drafts and document but just forward the documents to the issuing bank for payment.- Similarly if the LC is available by payment with any bank with issuing bank, your Ukraine Bank just act as a presenting bank that on your behalf presents the documents to the issuing bank for payment.In short, if you want to ensure that your Ukraine Bank would negotiate the drafts and documents or make sight payment to you, you should insist on a confirmed LC that is confirmed by your Ukraine Bank. This depends on whether the issuing bank agree to issue a confirmed LC and whether your Ukraine Bank is willing to add its confirmation to the LC. Normally, when a bank agrees to confirm the LC, it would insist LC allow TT reimbursement claim from the issuing bank.2) How to avoid discrepancy?As you know, the condition that trigger the issuing bank’s payment is that the documents must comply with the LC terms and conditions. If not, the issuing bank may refuse the documents notwithstanding that in practice 99% of discrepant documents are eventually take up and paid.So, to avoid discrepancies that may lead to the issuing bank’s refusal, when receiving the LC, the beneficiary should check carefully if there are any terms and conditions he cannot comply and ask for amendment before any shipment is made. Your bank can help you check LC terms and conditions as well as prepare complying documents.LCs would states that if each set of presented documents contains discrepancies, the discrepancy fee of say USD70 will be deducted from the proceeds. So, there’s no need for you to remind the issuing bank of that stipulation. As said, over 99% of discrepant documents are paid eventually. However, there’s still 1% left that the issuing bank will reject and return the discrepant documents, especially when the price goes down and the applicant does not want to receive the goods. So, KYC (Know Your Customer) is very important.Go ahead and good luck!Kind regards,Mr. Old Man

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