英语论文网

in international trade banks, laws, and transportation getting together to study and draft the UCP500. While the UCP500 still has its disadvantages, therefore in 2007, we need to take UCP600 as a standard to issue a L/C.

According to the Article II of the UCP600, the L/C means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honor a complying presentation. The function of the L/C is to solve the distrust and worry between the two sides in the international trade and to avoid that the importer cannot get their goods with payment or the exporter lose their goods without payment.

The L/C is a business of buying and selling the document. The banks involved with the L/C need to carry out their responsibility according to the clause listed in the L/C. The L/C is a kind of bank credit, while in some countries and areas, the two sides in the trade can issue the commercial L/C, but the bank L/C is more liable. In the practice of the international trade, different trades use different functional L/C in order to meet different demands. Thus different people can play their role to carry out their rights and responsibility. In this way can they deliver goods and pay for their goods on time.

The kinds of the L/C are a great many. It can be divided into different varieties by its property, purpose, time limit and so on.It can also be divided by its single function, special function, and its muti-function. But the frequently-used L/C in the international trade are as follows(Rowe,36).

The single functional L/C can be divided into six kinds.

Firstly, the Revocable Letter of Credit and the Irrevocable Letter of Credit. The former one has much more risk, and now we don’t use the revocable L/C, that is, nowadays the L/C is irrevocable once it is issued. It has the words “Irrevocable Letter of Credit” on.

Secondly, the Documentary Letter of Credit and the Clean Letter of Credit. The former one must include the documents which are required. The latter one is usually used by the two sides who are familiar with each other, so they don’t have to have some documents in it.

Thirdly, Confirmed Letter of Credit and Unconfirmed Letter of Credit. The confirmed L/C is issued by one bank and confirmed by another bank. The confirmed L/C has a high credit, and it can guarantee the payment successfully. The L/C with the word “confirmed” is the confirmed L/C, if not, it is the unconfirmed L/C.

Another one L/C, With Recourse Letter of Credit and Without Recourse of Letter of Credit. According to the regulation of the documents, it would be paid by the negotiation bank. If the people who own the documents were refused by the issuing bank, the negotiation bank would have the rights to ask for the money paid. But the negotiation need to show the With Recourse Letter of Credit. The Without Recourse Letter of Credit is the opposite.

The next one L/C is the Sight Letter of Credit and the Time Letter of Credit. The former one require that the beneficiary needs to issue the sight draft according to the L/C and hands in the documents, then the issuing bank should pay for it when seeing the sight draft. The latter one is that the importer need to guarantee for the bank of exporter that once the beneficiary issues the time draft, he should pay for it in some days regu