Documents for financing international trade:
57. I. Letter of credit (L/C) (аккредитив) - an instrument issued by a bank, in which the bank promises to pay a beneficiary upon presentation of documents specified in the letter of credit.
Commercial letter of credit - товарный аккредитив, возникший на основе торговой сделки.
Documentary letter of credit - товарный аккредитив, оплачиваемый при предъявлении отгрузочных документов.
58. Beneficiary (бенефициар) - is a seller, an exporter.
59. Types of letters of credit (виды аккредитивов) - commercial letters of credit are classified as follows: irrevocable and revocable letters of credit; confirmed and unconfirmed letters of credit; revolving and nonrevolving letters of credit.
60. An irrevocable L/C (безотзывной аккредитив) - obligates the issuing bank to honor drafts drawn in compliance with the credit and can be neither canceled nor modified without the consent of all parties, including in particular the beneficiary (exporter).
61. A revocable L/C (отзывной аккредитив) -can be canceled or amended at any time before payment; it is intended to serve as a means of arranging payments but not as a guarantee of payment.
62. Confirmed L/C (подтвержденный аккредитив) - a L/C issued by one bank that can be confirmed by another, in which case both banks are obligated to honor drafts drawn in compliance with the credit.
63. Unconfirmed (non-confirmed) L/C (неподтвержденный аккредитив) - is the obligation only of the issuing bank.
64. Nonrevolving L/C (неревольверный аккредитив) - most letters of credit are nonrevolving, they are valid for one transaction only.
65. A revolving credit (револьверный аккредитив) (for example, a 10.000$ revolving weekly credit ) -- means that beneficiary is authorized to draw drafts (up to 10.000$ each week) until the credit expires; the period of a revolving credit might be daily, weekly, or monthly.
66. II. Draft or bill of exchange (B/E) (вексель, тратта) - is simply an order written by an exporter (seller) instructing an importer (buyer) or its agent to pay a specified amount of money at a specified time.
67. The drawer (the maker, or originator) (трассант) - the person or business initiating the draft; normally this is the exporter who sells and ships the merchandise.
68. The drawee (трассат) - the party to whom the draft is addressed; the drawee is asked to honor the draft, that is, to pay the amount requested according to the stated terms.
69. Trade draft (торговая тратта) - in case of commercial transactions when the drawee is the buyer.
70. Bank draft (банковская тратта) - in case when the drawee is the buyer’s bank; bank drafts are usually drawn according to the terms of a L/C.
71. Payee (ремитент) - a person to whom payment is to be made; may be the drawer itself or some other party such as the drawer’s bank.
72. Negotiable instruments (реализуемые средства) - a draft or promissory note that is in writing, signed by the maker or drawer, contains an unconditional promise or order to pay a definite sum of money on demand or at a determinable future date, and is payable to order or to bearer.
Types of drafts:
73. Sight draft (вексель на предъявителя) -is payable on presentation to the drawee; the drawee must pay at once or dishonor the draft.
74. Time draft (usance draft) (срочный вексель) - allows a delay in payment; it is presented to the drawee, who accepts it by writing or stamping a notice of acceptance on its face. Once accepted, the time draft becomes a promise to pay by the accepting party.
75. A clean draft (чистый вексель) - is an order to pay unaccompanied by any other documents.
76. A documentary draft (документированный (товарный) вексель) - means that various shipping documents are attached to the draft.
77. A banker’s acceptance (банковский акцепт) - time draft that is drawn on and accepted by a bank.
78. A trade acceptance (торговый акцепт) - a time draft that is drawn on and accepted by a business firm.
79. Tenor (or usance) of a draft (срок платежа по векселю) - the time period of a draft.
80. III. Bill of lading (B/L) (коносамент) - the document issued to the exporter by a common carrier transporting the merchandise; it serves as: a receipt, a contract, and a document of title.
81. B/L as a receipt (коносамент-расписка) - indicates that the carrier has received the merchandise described on the face of the document.
82. B/L as a contract (коносамент-договор) - indicates the obligation of the carrier to provide certain transportation in return for certain charges.
83. B/L as a document of title (коносамент, дающий право собственности) - can be used to obtain payment or a written promise of payment before the merchandise is released to the importer.
84. Straight B/L (именной коносамент) - provides that the carrier deliver the merchandise to the designated consignee; is used when the merchandise has been paid in advance, when the transaction is being financed by the exporters; is not title to the goods and is not required for the consignee to obtain possession.
85. An order B/L (ордерный коносамент) - directs the carrier to deliver the goods to the order of a designated party; grants title to the merchandise only to the person to whom the document is addressed, and surrender of the order B/L is required to obtain the shipment.
Variations in the B/L:
86. Clean B/L (чистый коносамент) - indicates that the goods were received by the carrier in apparently good condition; the carrier is not obligated to check the condition of the merchandise beyond external visual appearance.
87. Foul B/L (“нечистый” коносамент, коносамент с пометками капитана “нечистый”) - indicates that the merchandise appeared to have suffered some damage before being received for shipment.
88. On - board B/L (бортовой коносамент) - indicates that the merchandise has been placed on board the vessel whose name is designated on the document.
89. Received - for - shipment B/L (коносамент с пометкой “получено для транспортировки”) -allows for the possibility that the goods are sitting on the dock and might remain there for some time; is not an acceptable document unless it has been specifically authorized in the L/C.
90. On - deck B/L (коносамент с пометкой “на палубе”) - indicates that the goods have been stowed on deck; the banks will refuse to accept on-deck B/L unless authorized otherwise by the L/C.
Additional documents:
91. A signed commercial invoice (подписанный счет-фактура) - is issued by the seller and contains a precise description of the merchandise; unit prices, financial terms of sale, and amount due from the buyer are indicated.
92. Insurance documents (страховые документы) - must be: 1) as specified in the L/C; 2) issued by insurance companies or their agents; 3) expressed in the same currency as the credit; must not be dated later than the date of shipment carried on the face of the shipping documents.
93. Consular invoices (консульские счета) - are issued by the consulate of the importing country to provide customs information and statistics for the country and to help prevent false declarations of value; may be combined with a certificate of origin of the goods.
94. Certificate of analysis (сертификат экспертизы) - may be required by health or other officials of the importing country or by the importer as assurance that it is receiving what it ordered.
95. Packing list (упаковочный лист) - may be required so that the contents of containers can be identified, either for customs purposes or for importer identification of the contents of separate containers.
96. An export declaration (экспортная декларация) - is a document prepared by the exporter to assist the government to prepare export statistics.
97. “‘FOB” (free on board) (свободно на борту – ФОБ) - international trade term in which exporter’s quoted price includes the cost of loading goods into transport vessels at a named port.
98. “FAS” (free alongside) (свободно вдоль борта – ФАС) - term in which seller’s quoted price for goods includes all cost of delivery of the goods alongside a vessel at the port.
99. “C&F” (cost and freight) (стоимость и фрахт – СФ) - price, quoted by an exporter that includes the cost of transportation to the named port of destination.
100. “CIF” (cost, insurance, freight) (стоимость, страхование, фрахт – СИФ) - exporter’s quoted price including the cost of packaging, freight, or carriage, insurance premium, and other charges paid in respect of the goods from the time of loading in the country of export to their arrival at the named port of destination or place of transshipment.
