x You are importers, or exporters who are participating in transactions and international payments need to carefully understand the method of L/C at Sight?
x How do individuals, organizations and import -export enterprises have not grasped the process of payment and issuance of at Sight LC? Is complicated?
X and exporters, importers also need to know in LC at Sight, what content? Who are the parties involved in this L/C payment process?
Proship.vn we will quickly convey the knowledge to know about LC at Sight? Who are the parties involved in AT Sight L/C? How is L/C at Sight issuance process?
What is L/C at Sight payment?
What is LC at Sight? L/C at Sight is the most common letter of credit today and is the type of L/C right away, unable to cancel horizontally.
The seller will be paid when presenting a complete and suitable voucher and the bank will handle vouchers up to 5 working days. Buyers have an disadvantage that if there is no payment available and often find external funding (mainly from open banks).
Participants in payment at Sight L/C
What is the form of payment of LC at Sight, which has been clarified above. So, who are the parties involved in AT Sight L/C payment? Proship answered as follows:
Exporter (Beneficiarry - Seller)
As a seller, the person who benefits the letter of credit, has the right to receive payment when presenting a valid voucher at the request of AT Sight L/C.
Import (Applicant - Buyer)
Buyers, people ask the bank to open at Sight L/C to commit to pay the exporter.
The Bank notifies the letter of credit (Advising Bank)
As a bank in the country of the exporter, it is responsible for notifying L/C to the exporter.
Issuing Bank (ISSUing Bank)
As a bank required by the importer to open L/C, commitment to pay for the exporter when the voucher is suitable to the conditions of the letter of credit.
Confirming Bank, Discount Bank (Negotiating Bank), Bank for payment (Reimbursing Bank)
Depending on the cases, these banks may have or not participate in the payment process at Sight L/C.
What content does L/C at Sight include?
What is the content of LC at Sight, what? Content on L/C at Sight includes:
Basic information
Basic information includes:
- LC number;
- Name and address of the buyer (the person requesting the issuance of L/C) and the seller (beneficiary);
- The payment amount is specified in a specific currency;
- Detailed description of goods or services traded, including quantity, specifications, quality and value.
Deadline and place of delivery
Regulations on time limit and delivery location:
- Last time for delivery or service;
- Location or port of goods delivery.
Duration of L/C
The expiry date of L/C, after this day L/C is no longer valid.
Required vouchers
The list of necessary documents to receive payments such as commercial invoices, bill of lading, origin certification, inspection voucher or any other special documents as required by the deal.
Payment conditions
The "AT SIGHT" payment term is immediately paid after the valid documents are submitted to the bank.
The issuing bank and the bank notify/confirm
The name and information of the L/C issuing bank and the bank notify or confirm (if any).
Other terms and conditions
Any other special requirements or conditions related to transactions.
Signature and seal
Signature and seal of the issuing bank to confirm the legality of L/C.
Regulations on compliance
Terms of compliance with international regulations such as the rules of unified letter of credit (UCP) of the International Chamber of Commerce.
L/c immediately pay and l/c deferred deferred payment? What is the process of issuing at Sight L/C?
Join Proship to find out the difference between L/C deferred payment with L/C immediately and the process of issuing Lk at Sight:
Distinguish L/C at Sight immediately and L/C Deferred deferred
Refer to the following table to understand the difference between LC right and deferred LC:
| Comparison criteria | L/C immediately pay (at sight l/c) | Deferred L/C) |
| Payment time | Immediately after the exporter presented a valid document. | After a certain period of 30-90 days from the date of delivery/presentation. |
| Payment properties | Payment as soon as the voucher is validated by the bank. | Payment made on the maturity date agreed in advance. |
| Risks for sellers | Low, because the seller receives the money right after completing the delivery obligation and presenting valid documents. | Higher, because it is not until the maturity date to receive the money, the potential risk of the buyer does not pay on time. |
| Benefits for buyers | There is no time to delay payment, must pay immediately after the voucher is confirmed. | Buyers have more time to collect money, recover capital after receiving the goods, helping to optimize the cash flow. |
| Expense | No interest costs or late payment costs. | Buyers may be subject to additional interest expenses by the bank to advance the seller during the waiting time for payment. |
The process of issuing at Sight L/C
The process of issuing LC at Sight is as follows:
- Step 1:
Importers and exports signed contracts.
- Step 2:
The importer suggested that the Bank of the Importer issued LC to the beneficiary as exporter.
- Step 3:
The issuing bank will set up LC and through its agent bank at the export head of the notification of the opened letter.
- Step 4:
The notice bank (exporter) will notify the exporter of the LC content and check if it has matched the conditions of agreement on the contract and proposed to confirm, and send the original LC to the exporter.
- Step 5:
Exporters accept LC.
- Step 6:
After delivery, the exporter set up a set of documents at the request of LC and presented through the Bank to notify the LC Open Bank for payment.
- Step 7:
The bank opened the LC to check the validity of the voucher, if valid, then make payment to the exporter, if not suitable, refuse to pay and return the dossier to the exporter.
- Step 8:
The bank opened the LC to the importer and transferred the original voucher to the importer after confirming the payment or payment.
- Step 9:
The importer checks the voucher, if it is appropriate, the payment is made or accepted to pay. If it is not suitable for LC content, there is the right to refuse to pay.
What is LC at Sight and important knowledge about payment immediately that Proship Logistics has just mentioned above, hoping to be a useful reference for exporters, imports, ... Any questions about international payment methods in import and export or if you need to use cheap multimodal transport services, contact 0909 344 247 for assistance.
