EKSPOR IMPOR PART #8 - MEKANISME LETTER OF CREDIT || JURUSAN MANAJEMEN - Albert Steinado

Summary

This video explains the process of opening a Letter of Credit (LC) in international trade. It covers the essential documents involved, such as commercial invoices and bills of lading, and details the various parties engaged, including the applicant, beneficiary, and different banks like the issuing, advising, and confirming banks. The video also emphasizes the importance of fulfilling LC requirements and the step-by-step process from application to payment, offering valuable insights for those involved in international trade or management.

Takeaways

• 😀 An LC application is a request from the importer to a bank to open an LC, based on an agreement with the exporter in a sales contract.
• 😀 The LC acts as an instruction to execute the sales contract but is not part of the contract itself.
• 😀 The application for the LC is irrevocable once issued, meaning the importer cannot cancel it unilaterally.
• 😀 The LC application must include key details such as the form of payment, beneficiary’s name, value, shipping terms, and required documents.
• 😀 Important documents for the LC include a commercial invoice, which details the goods and payment terms, and a Bill of Lading (B/L), which serves as proof of shipment.
• 😀 The LC application must include information about the shipment, such as port details, delivery methods, and specific documents like the Bill of Lading.
• 😀 There are two types of LCs: commercial and documentary, and at least two documents must be provided for the LC: a commercial invoice and a Bill of Lading.
• 😀 The issuing bank is responsible for opening the LC, while the advising bank forwards the LC details to the exporter.
• 😀 The confirming bank guarantees the payment to the exporter, ensuring the exporter receives the agreed amount for the goods.
• 😀 Various parties are involved in the LC process: applicant (importer), beneficiary (exporter), issuing bank, advising bank, confirming bank, and carrier (shipping company).

Q & A

What is the purpose of opening a Letter of Credit (LC)?

The purpose of opening an LC is to provide a guarantee of payment to the exporter, ensuring that the payment will be made according to the terms of the sales contract once the necessary documents are presented.

What are the key parties involved in the LC process?

The key parties involved in the LC process include the applicant (importer), the beneficiary (exporter), the issuing bank, the advising bank, the confirming bank, and the carrier (shipping company).

What are the essential documents required for an LC application?

Essential documents for an LC application include the commercial invoice, the bill of lading, and other shipping documents that outline the details of the goods, payment terms, and delivery instructions.

What is the difference between a commercial invoice and a bill of lading?

A commercial invoice details the goods being sold, their price, and terms of payment, while a bill of lading is a transport document that acts as proof of shipment and ownership of the goods.

Why is a bill of lading so important in international trade?

A bill of lading is crucial because it serves as proof of ownership and a document for claiming the goods upon arrival. It also functions as a security for the payment transaction.

What does the applicant need to do when applying for an LC?

The applicant (importer) needs to submit an application to their bank, specifying the terms and conditions for the LC, including the type of payment, details of the goods, and the documents required from the exporter.

What does the advising bank do in the LC process?

The advising bank informs the exporter (beneficiary) about the LC, providing details of the terms and confirming the authenticity of the LC issued by the issuing bank.

What role does the confirming bank play in the LC process?

The confirming bank adds its confirmation to the LC, guaranteeing payment to the exporter, thus providing an additional layer of security.

What happens once the LC has been issued?

Once the LC is issued, the exporter can ship the goods, submit the required documents (such as the bill of lading) to the bank, and receive payment according to the terms of the LC.

Can an LC be canceled once it has been issued?

No, an LC cannot be canceled unilaterally by the applicant once it has been issued. It can only be amended or canceled with mutual agreement from all parties involved.