silly L/C clauses

[size=4]one US buyer is going to open an L/C to us, but i found there were some silly L/C clauses, pls see the following clauses included in their L/C terms:"J5n$]
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zQ3\!l] >All banking charges including LC opening fee, amendments and discrepancies in the negotiating documents to be charges to the beneficiary??s account. [color=Red]--->this is not reasonable, LC opening fee should be charged to the applicant, and the other charges  should be charged as per  the reason which caused the changes.  [/color])Cf1dvA@^gy{
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>We would allow only one amendment per LC, for each additional amendment, there will be a handling chares of USD150.00 In addition to the banks charges and the penalty will be deducted from the proceeds.[color=Red] --->even we ensure we can finish the shipping without any amendment of L/C, it is not acceptable for beneficiary to accept this clause.[/color]
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#y|4QF.WvML9c0w >3 pcs in each color in required size as per PO should be sent to IN7 Clothing, Inc. office within one week of opening of LC on the vendors cost. A letter of confirmation duly signed by Ms. Vazirani of George and Martha confirming the same should accompany the Negotiable documents. [color=Red]--->it is not acceptable, nobody can assure we can get this letter even we arrange the samples exactly, this letter cannot be considered as a part of negotiable documents at all.[/color]YE8].@%S!u7R+X9kg

)H"\] yM5x5Q A >A copy of inspection certificate duly signed by Mr. Babita Vazirani along with her passport copy should be integral part of Negotiable Documents.[color=Red] ---->it is not acceptable,  this signed inspection certificate and passport copy cannot be regarded as integral part of negotiable documents.[/color]^+zq;h5D2Ln(RI
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i came back to the buyer with the words highlighted in red, and rasied our problems and worries, then i got his reply today as below:
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[color=Blue]Dinah once again ¡§C 7wu?.m _a4?&s'~
pls be reminded that we are not there to hurt hyou ¡§C but we are trying to protect ourselves.
Sn"HO%j~6uQB And we buy over 8.0 million units a year.We are not new in the business.
:@O8{-xZr'|!d/`Q If it does not work ¡§C we don??t mind walking away from the deal ¡§C but we don't change the terms for anyone. I)ob_mx
pls trust us so we can trust you¡§C we want to also buy sweaters from you and we don??t want to hurt our relationship with anyone.[/color] Wg@H^ Y#D.N+xk

:^ER[5\9l0G now, i think even we can accept the 1st and 2nd clauses above,the 3rd and 4th clauses are really unacceptable
#@T%PPoF[*F these clauses never appeared in the L/Cs we finished before,also this buyer is complete new for us
!jz+Q9T9J9w i learned that some companies failed on L/Cs with these clauses and lost lots of money in business.@QL(T6JE8^2C`6Z
but it seems that this buyer is quite firm on their terms,and from their company info, their company is very big and strong#P)S0v;uT;\0@5uT
moreover, we have invested lots of money in this deal, what to do?   nC&U-rS Z,AJjM'p
did you meet this kind of L/C clauses before? pls give me some advises....[/size]

Seldom doing by LC.
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bi%c%X$z2D Now i am doing LC  with a customer from France,he is always kind to us,when i talk with them the clause is not easy to do,they will accept our reasons cuz they want buy from us.9a)og _/j:K%W:V
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If you cannt accept or you cann't sure to prepare all the documents well on time,talk with your customer,if they want buy from you,they will stand on your side.

Dinah,nice to see your post again, your experience is so good.

Reply #2 lily_trade's post

thanks lily
Q8OA$Hnl|M you are right, if the buyer really want to buy from us, thay will consider at our position
1K$[:I `&u9cT\ez unfortunately, my buyer is quite firm on their conditions and said they wouldn't changed the terms for anyone^m.Gf5j{
i think they are not sincere at all...:@

Reply #3 Lisa_Dai0713's post

how are you lisa? :hug: :hug: :D :D

unsolved troubles

[size=4][color=Blue]below is the response from the buyer, i found their explanations are as silly as their consitions, we perceived that it is riskful to do this deal with them, since they don't want to pay any cents for the business...[/color]/DIcDS+` \cfh

8V&M4X|4_)K6qK*]%h Dinah,
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I have reviewed your queries and here are my replies to it, there is nothing major and I am sure if you go thru our replies you can easily adhere to it. A*d:GO%fFq

6^5z!~XE6E G a. Lc opening charges ---Please note these charges are static by the bank and it cost only 1% of to the total lc value or $150 maximum 100+50 for transmission cost.U:Yo"Z$N_I

5Yj5P5O"j(B b. Re lc amendment ¡§CThe 1st amendment is free ¡§Cnot chargeable, if more then the factory has to pay for the amendment which is very fair, amendments are normally done due to some delays etc which if because of the vendor he needs to take responsibility of the same.  yl:j6G_&V

[&^hL9jE c. Re the sample letter- we can assure you as soon as we receive samples within 24 hours the letter will be with you, it is all programmed at times even less then 24 hours.
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D, Inspection certificate --- here too once we receive the complete set of copy documents you will receive the inspection certificate within orless then 24 hours
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!@GNl%X)p[ y Please note we are doing these clauses with all our merchandise getting imported to USA from various countries and we have given the vendors the letters as per our assurances. there has been no delay but you need to ensure that all documents we received are correct and in par to our requirements. These are checkpoints for us, which we cannot give up.  
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;QIS!\c&q!i8? In addition I also saw your query on partial shipments :^;a4i3?*\l ^8`
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Please understand we will accept partial shipment only requirement is you need to inform us in regard to the same and obtain our approval for it by mail. As we prefer to get our the goods by in color and size ratios so the partial qnty can be useful.
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Certificate of weights and measure ¡§CYes YOUR company can issue it ¡§Cbasically it has the gross weight and net weight no of cartons/dimensions etc. If you need, I can send you a format of the same. +r1\YW,AE
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,e)}/O:l)U Please reply if it satisfies you. 9X*C|"XS-~Jn*V

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Regards[/size]

I have no experience about L/C , but I think above four clauses are unfair terms .

I had processed L/C before , but this Pakistan customer is very kind , their clauses on L/C  were easy to do, even we had gotten all money but the customer was still not getting their goods :lol

New customer,crazy L/C! I suggest you should be careful.Don't give any chance to the cheat.As a exporter,it's very important to recover the money,rather than the orders only.I think you have two choice:1:Try your best to persuade the customer to amend the L/C clause;if they didn't accept and give you unacceptable pretext.The best way is give up the order.VaM!f!i6y
2:You should buy ECI(Export Credit Insurance) to avoid risk.

Difficult to get ready all the documents.What does your customer want do?

I'm a newbie here, so I don't knew how to deal with it. But I gree with lily. If your buyer really want to do business with you. He will consider at your position. I want to ask a stupid question why we can't accept the said clause. Thank you.

dinah,it's unfair and riskful to do this business with a new customer..J3B'LrtN tL \
1. if you can't get the letter of confimation and the inspection certificate on time that mean you can't ensure prepare all the negotiate documents6d CF&O_
2.according to the international practise the buyer should pay the open feeGgjI/\Pvha
in a word you should be careful and make sure you can get the money can you accept this L/C

[quote]Originally posted by [i]chenjane[/i] at 2008-5-29 09:09 [url=http://forum.fobshanghai.com/redirect.php?goto=findpost&pid=3254377&ptid=323916][img]http://forum.fobshanghai.com/images/common/back.gif[/img][/url]
0D+@$k%|#{x[ I had processed L/C before , but this Pakistan customer is very kind , their clauses on L/C  were easy to do, even we had gotten all money but the customer was still not getting their goods :lol [/quote]
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+B1{4h5{8d+m'z*s it is very lucky to handle L/C terms with such a kind buyer...:D

[quote]Originally posted by [i]lcs822[/i] at 2008-5-29 13:51 [url=http://forum.fobshanghai.com/redirect.php?goto=findpost&pid=3254497&ptid=323916][img]http://forum.fobshanghai.com/images/common/back.gif[/img][/url]V ^Co%zU R(@
New customer,crazy L/C! I suggest you should be careful.Don't give any chance to the cheat.As a exporter,it's very important to recover the money,rather than the orders only.I think you have two choice:1:Try your best to persuade the customer to amend the L/C clause;if they didn't accept and give you unacceptable pretext.The best way is give up the order.
J(qo+_j.R#Q H~-{ 2:You should buy ECI(Export Credit Insurance) to avoid risk. [/quote][3F.{"Qv8a
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yep, you are right...:D \ DnS*U;FSwv*V
have you tried ECI before? i knew little about it, i think this service is proper for big enterprises... H V1Q(Ap)XrCBu
i am negotiating with the buyer now, hopefully, the buyer will ammend those clauses soon....:victory:

[quote]Originally posted by [i]lcs822[/i] at 2008-5-29 13:53 [url=http://forum.fobshanghai.com/redirect.php?goto=findpost&pid=3254501&ptid=323916][img]http://forum.fobshanghai.com/images/common/back.gif[/img][/url]2^+wY'OA&} o'J
Difficult to get ready all the documents.What does your customer want do? [/quote]k Sl!O
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she said she just want to use those connditions to protect themselves....Uq%X(q];Q*Z2qY
i have lost a few days on this problem :Q :Q ,d UP8V2M$|(`;o/@
anyway, we won't accept the L/C if they don't remove or revise those clauses...

[quote]Originally posted by [i]sunnysunshine12[/i] at 2008-5-29 15:12 [url=http://forum.fobshanghai.com/redirect.php?goto=findpost&pid=3254550&ptid=323916][img]http://forum.fobshanghai.com/images/common/back.gif[/img][/url]Th}/F!P4Gn7`t
I'm a newbie here, so I don't knew how to deal with it. But I gree with lily. If your buyer really want to do business with you. He will consider at your position. I want to ask a stupid question why we can't accept the said clause. Thank you. [/quote]d l5G)xS gL on
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[color=Blue]since the docs she asked in those claused are completely unnecessary to be put as negotiable documents in L/C5A3Caq7ZT)Q(Q5t
also we are not sure if they will give us those confirmation letter and inspection letter which were required to be signed by their person
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| if we accept those clauses, but we cannot get those docs ready by then, we will fail to get our money from bank since our negotiable docs fail to those L/C clauses...[/color]

[quote]Originally posted by [i]minzhilong[/i] at 2008-5-29 16:20 [url=http://forum.fobshanghai.com/redirect.php?goto=findpost&pid=3254583&ptid=323916][img]http://forum.fobshanghai.com/images/common/back.gif[/img][/url]
/WDn/k.^`4u\6?t dinah,it's unfair and riskful to do this business with a new customer.
WZ q,_)h%C%`/Y 1. if you can't get the letter of confimation and the inspection certificate on time that mean you can't ensure prepare all the negotiate documents.Aiee%o
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2.according to the international practise the buyer should pay the open fee
#q%f!g5cbF&` in a word you should be careful and make sure you can get the money can you accept this L/C [/quote]

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(B}at q Hv.eI$J:@.gA yes,dear, thank you for your helpful advices
pE&`+^] we won't accept those clauses even though they said that they wouldn't change the terms for anyone, all of their suppliers must follow those terms and they won't make troubles to their suppliers

my negotiation

[size=3][color=Black]dear Sam,:M3cDW/QLv
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re L/C for H246 men's jacket, our bank advised that the clauses you mentioned were your applicant's credit and will only, they cannot handle the L/C with too much silly clauses for us, pls do to talk with your buyer about our below responses exactly:
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1) the L/C opening charges never required to be afford by beneficiary as we all know, all of China suppliers won't afford L/C opening charges, we only afford the ammendent charges caused at our side, this is quite fair for the parties do business together, pls revise this clause;
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2) re sample letter: you can send your person to check the good in our factory if you don't believe our work, pls confirm a date when you will come to check the goods if you really care about the quality of the goods and really serious about this deal, put sample letter as negotiable docs is completely unnecessary, pls remove this clause;
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5[Q }VF 3) some uncessary documents:T;Th;F'btD-L
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A. re inspection certificate: what's the complete set of copy documents you are talking about? we cannot get the exact shipping docs (include B/L) on hand till the containers leave from China port, therefor, we cannot control the situation at all after the goods leaving China port, also and you can change your mind at any moment, pls remove this clause;4Zg5| z|1q
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p/kd*\Mhg8f'F1i+Eu B. certificate of weights and measures: i have to say this is unnecessary docs totally, if you really want it, i can make it for you, but pls remove this clause in L/C clauses;6WHq8m7Q9h l7t
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_B*lt%g#zK C. re single or multi-country declaration of origin for fabric and trims origin: all of the fabirc, trims and works have been finished in China, so the Certificate of Origin is proper for your, no single or multi-country declaraton can be provided, pls remove this clause;
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5Cw[ oG*L D. re container load and freight manifest: we don't understand what you want really, but we can anticipate that it is unnecessary for negotiable documents, pls remove this clause;
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4) this is ready-made goods business, it is not quite necessary to do L/C actually, what's worse, you put so many unreasonable claused for this stock under L/C conditions!{Z-}I2d(H-o[
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5) we will ship the goods in one time, then no need to consider if partial shipment is allowed now;
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Z'g9JP~W now, we advice you to pay 30% deposit + total amount for accessories + 70% balance by L/C after revising the L/C as per our request to push this business onwards, we are reliable supplier, we always try to do the work as best as we can and put our buyers'  interests as TOP ONE in our mind, we wish the buyer also can treat us fairly and friendly.4V+g)~z"\+C
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we need a solution before this Wednesday, since we have another buyer also want to take the goods, we wish you won't make us disappointed on this deal, we even expect to develop more business with you in future.c-s$v$zd{ z6Y

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7L b2?^.f%y [[i] Last edited by dinahsun at 2008-5-30 13:35 [/i]]

solve the problem

[size=3]After talking with the L/C operator in the buying office, I received the below response which said that they will send the revised L/C draft as per our requirement, i wish this is a good beginning for this deal...:D :D A4Sr+{ S:i

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It was very good talking to u yesterday and I am sure this will strengthen our relation.
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H!i6rU0jxN2n As for LC AS DISCUSSED will work it out and resolve the same.@ H$S'V#T
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By tom I will give you a clearer lc . j'Lqa.A
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However I need you to urgently send today if possible itself samples 3 pcs in sz large with as is labels no need to change the labels to our USA office directly to the attn of Neil/Babita.
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Please confirm to me by mail and also give me the awb details to track the same.
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Regards[/color][/size]
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[[i] Last edited by dinahsun at 2008-5-30 13:34 [/i]]