hello
I have a very urgent and important question.
we will be importing some special goods which will only be produced for us and the contract is for 6 vessels. we wanted to open a L/C for all 6 shipments and after the supplier makes each shipment and present the docs to the bank he will receive his payment.
the supplier insist on a payment term as below;
he wants us to open L/C for all 6 vessels but 1st vessels 40% value will be paid after 300 days starting from the L/C date without any conditions. the reason he gives for such a condition is that he is taking a big risk of producing and sending it to the stock pile and in a case of us changing our minds and not sending the vessel he will be in a big risk but in a case like this if we accept his terms we will also be in a big risk because no matter what he will receive his money after 300 days even if he does not make any shipments.
In a case like this happens and he does not make shipments is there a way that we would be able to stop that payment if there is a fraud or con.
thank you and waiting for your important replies soon.
best regards
Umut
Defered L/C
My answer to your inquiry is to request a performance Guarantee to refund the amount paid in case the beneficiary failled to fillfull his obligation under the L/C . If you affraid that the beneficiary submit a comply documents under the A/M L/C without making a real shipment you must requir some documents for protection such as Pre shimpent certificate issued by qualified companies such as Loyyds , and be aware to state the name of the company and it is full address who must issued such certificate , and not refer to it as (qualified company).
hope the above is answerd to your inquiry.
Best Regards
Sorry for being so late
Maybe you could think about an advance payment guarantee with a reduction-against-documents-clause to secure the first - well - advance payments.
However, if the beneficiary is financially rather weak - this wouldn't help him a lot.
However, if payment is claimed under the advance payment guarantee shortly before shipment, the beneficiary is lost again.
I think there is no ideal way which helps without having any negative effects.
-Each long journey starts with a small step-
Best regards
Frammi