When a business agreement is signed by contracting parties, the most important element is the price factor. Especially, for ① Import and Export price profitability ② Setting up sales price ③ Types of currency settlement.

As per the account opener’s request, a letter of credit is sent to the exporting party, therefore it is also known as credit writing bank, grantor. Even though there is a negotiating bank, paying and accepting one under UCP 500, the opening bank on the letter of credit and confirming bank’s payment obligation is strongly emphasized.

The purchaser or main party under a negotiating agreement, would have his regular transaction bank opening a letter of credit. The applicant or account opener, as a rule, would fall into the purchaser category, at times it can be a third party who’s under negotiations with the purchaser. The account opener is at the same time, the consignee of the cargo, will be the payer of the bill of change. Depending on how the role of the account opener is seen, he can be known as importer, opener, buyer, accountee, drawee, consignee, accredited Buyer

If the currency on the letter of credit, isn’t from the any of the negotiating parties, but a third-party currency, then the depository correspondent bank of the settling bank becomes the main bank for transaction, and is known as the reimbursing bank for being the bank that repays the promissory note to the main negotiating bank.

Performance guarantee makes sure that depending on the contract regulations, the letter of intent is delivered and performed, in other words the performance guarantee is a warrant, requesting the other party to respond to all of his responsibilities, in case it is not fulfilled. If a deposit contract is not fulfilled, the deposit shall be paid.

Customs refund, is when importing raw materials, taxes are paid and cleared; the materials are used for manufacturing items, when the process is finished, among all paid taxes, a refund can be requested on those taxes. These types of tax refunds were first applied back in July 1st, 1975. The purposes of implementing this refund policy instead of continuing, the prior non-dutiable charges on raw materials were: ① Simplify the process of following up ② Expedite locally made raw materials.
Customs refund system, is an exemption law that covers taxes on export raw material and refund policy , that is clearly differentiated from other tax related legislation and others. When we say others, it makes reference to the fact that when we mention tariffs, we refer to apart from the tariff, the inland duty (special consumption law and state taxes are also paid, and after export related payments are finalized, the taxes are to be refunded. So, when we mention tariffs, it includes, special consumption law, and state taxes. And the customs refund system, covers the previously mentioned types of tariffs. But also the defense tax, which is paid along with the above mentioned taxes, it is in accordance to the defense taxes. Therefore, it is included in the refund process. In reality, when we import raw materials, there could be a period of deferring collection, or based on the offset system, the notification on tax can be postponed, being cleared from customs. The materials are then authorized to be used and depending on specific cases, after the exports have been made, the taxes are paid or refunded, and even without any process for payment, it can be set off. It really depends on each case but what we refer to normal exports, we refer to a less than a 60,000 USD worth of goods, and it includes the selling of foreign currency, or construction work overseas, a free export zones, specific (licensed) areas that at the end can be summarized as anything that can bring about foreign-exchange earning method/action. The notion of refund, can refer to the total net amount that was paid on taxes, and that is indeed the principle, yet but it isn’t the exact amount in some cases.

The party that is willing to purchase a material or item with foreign-exchange purposes, can request to a foreign exchange bank, in accordance to the foreign trade financing policies, an opening of local credit, letter of purchase approval or the letter of purchase approval of imported materials costs. A letter of purchase approval does not depend on local credit, but when locally produced items are purchased for foreign exchange purposes, as raw material or item, the president from a foreign exchange back issues a certificate based on the local credit. The foreign exchange bank can issue this letter of purchase depending on the export credit, export agreement, foreign currency deposit Certificate, local credit etc.
The letter of purchase approval has the purpose to offer a chance to those that fail local credit, to obtain the foreign exchange purposed items. On the other hand, when mid-size companies (Exporting mid-size companies included) are trying to purchase raw materials or machinery for obtaining foreign currencies from public procurements, Small and Medium Enterprise Cooperatives, and general trading company, the purchase request can be requested. Imported materials cost’s purchase approval is based on obtaining the raw materials or machinery for obtaining foreign currencies before it goes through a production process, therefore the foreign exchange back will refer to the local credit to issue the certification.

Commonalities and Differences between, Letter of credit & Letter of purchase approval

(1) Commonality
 ① When tax exemption & return of raw materials for export or complete product are purchased for local use.
 ② Considered as actual exports to the supplier.
 ③ Considered as raw materials for obtaining foreign currencies’ performance record.
 ④ VAT’s zero tax rate

(2) Differences
 ① The letter of credit does guarantee the payment, but the letter of purchase approval only applies to involved parties , meaning that it doesn’t concern the bank, therefore the latter doesn’t guarantee the payment.
 ② Under the letter of credit, export financing is viable as a loan, yet under the letter of purchase it’s not.

Tariff concession is applied to the GATT member countries and it removes the duty for certain goods that an importer would otherwise pay under the tariff. At times can be a reduction or an increase. The tariff concessions are clearly shown under the custom tariff, where the items on the list, are called tariff item. The tariff concession can be as follows:
① The Tariff that is reduce.
② The term where the current custom tariff is not increased.
③ Is limiting the amount of custom tariff increase, in case that it has to be done.

When after a promissory note has been suggested to the payer, and a certain period of time has elapsed, a bill of exchange can be drafter. After sight buying rate promissory note, is based on selling off the imported goods and with the obtained funds, the promissory note can be cleared. The sight buying rate promissory note, involves the acceptance of the promissory note (taking over), the take over of the promissory note entails, that when the sight buying rate promissory note is suggested, it means a promise to make the payment before due date but most people, wait until the actual duet date.

① After sight : After the promissory note has been delivered to the importer, 30 days or 60 days the payment shall be made, and it is shown as => 30days after sight(30d/s), 60days after sight(60d/s)
② After date : After the promissory note has been issued, and a certain period of time has passed the payment is made, for example, 30days after date(30d/d), 60days after date(60d/d), and “date” refers to the date in which the promissory note was issued. In other words, even though it is an afterdate promissory note, the after sight one, gets delayed for standard postal mail days.

The promissory note that is based on the letter of credit, if it’s a time draft (bill payable at a long or short sight) it’s called a sight credit. And the Usance credit is the letter of credit that demands the usance credit. The sight Letter of credit, should be payable to the opening bank, and the irrevocable letter of credit, means that the opening bank had promised the payment, therefore when the documents proving the content of the letter of credit, the opening bank should make the payment. The usance letter of credit’s beneficiary, after the time draft, can receive the total amount from the promissory note or deduct the reduce taxes prior to the usance period of time and receive the payment. In the case of the importer, after receiving the shipment, during the active promissory note period, should sell the imported items, to clear the promissory note.

The beneficiary to the original credit, who’s the exporter, can use the letter of credit in his hands, for the issuance of a second one involving parties that could provide materials (providers, contractors) for producing the goods. The second letter of credit shall be issued by his regular transaction bank, and this type of credit is known as local credit. The process of obtaining local credit is similar to transferable credit, but the latter has what is transferable clearly written on it. The local credit is issuable as long as certain requirements are met. The local credit procures that the exporter is able to provide the goods to be exported in question as well as, providing a payment guarantee to those that provide the materials to produce his goods, and at the same time, it can make possible the financial support, loans that the exporter might need in the process. But that’s not it, also, in terms of trade management and tax reforms, the local credit validates, the export rate to the supply rate providing the same benefits as the original credit. In other words, it provides a boost in local raw material use as well as the procurement of foreign exchange enhancement.

An exclusive contract is type of agreement whereby a person or exporter is made to be the sole agent for selling a particular product or service within a specific market or demographic area and the buyer is prohibited from doing any business with another that offers the same type of items. It’s falls into the exporting field where parties are confined to negotiate with each other only.

The promissory note that is issued through LC (local credit), delivers the preconception of a distribution that will render cash as payment, and this is called a negotiation credit (NC). The NC promises the payout to the endorser, drawer and bona fide holder yet the straight credit mentions none but the drawer, opening bank or an equally validated bank, where it promises to pay out only if there is an agreement that proves the dealings.

The beneficiary, after finalizing the shipping process, would issue a bill of exchange under the opening bank’s name, and attach the shipping documentation needed for LC, requesting the negotiation for the opening bank’s bill of exchange, and the bank that accepts to take the bill of exchange is known as the negotiating bank.

What becomes a collateral to the bill of exchange, the shipment documents, if not attached, yet only the bill of exchange is sent, is known as clean bill. In this case, the exporter or seller, would send out the shipping documents personally, and after the bill of exchange would be issued through his regular bank, and after approval, it can be considered a type of deferred payment. But because there is no guarantee that the bill of exchange will be accepted, only for minimal transactions (insurance costs, shipping costs, fees etc.) it can be used.

Regardless of the contract being domestic or international, a binding claim-obligation relationship is created for a period of time, where an agreement will set the policies for them to comply to, with legally binding responsibilities for them to perform. In most international trading, it is the trading of goods what’s most commonly seen. Therefore, it is understandable that what governs this relationship are based on the common principles from international sale and purchase of goods contracts. Furthermore, trading contracts as an international trading/sales contract, draft policies to regulate how the seller would transfer the rights to the property in goods to the buyer, and for the exchange he is to receive a certain amount of compensation.

Financial Trading is based on a systematic financial policy, when a foreign financial institution or the trading party offers the necessary funds to Export and import companies through various steps, for example export-import trading or related dealing be it domestically or Internationally, in other words, known as financial trading or export subsidy. Financial trading, can be categorized as follows, depending on the main provision agents, the domestic finance managed by domestic financial institutions, international finance, managed by international financial institutions, trading credit from trading parties.
Depending on the purpose to use the funds, the loan period can be within one year, known as working funds and the one that goes above one year, known as funds for equipment. But most of the financial trading refers to working funds. And financial trading, depending on the time of loan being granted, meaning before the present trading commences, it can be grouped as the shipment funds that are available before the actual shipment, and the shipment funds available after the shipment. The present financial trading, among these, the purchasing of export draft and the export import loan from export import banks are provided after the shipment whereas other finances are offer before shipment. The financial trading, depending on the currency it can be divided into the local currency and foreign currency finances. The present financial trading covers the local one, but others deal with foreign ones too.

PNTs are when a trading company along with the undertaking institution, state under an agreement, having a letter of credit as evidence, that the undertaking institution is the payer, and that the usance bill received by the latter institution, will receive the funds through selling the goods. Promissory notes in trading are not targeted as rediscount under financial policy like financial trading. The institution uses it’s own financial resources as basis to receive the promissory note issued by the trading company. and from there it’ll sell the goods to common investors, and when the note expires, it pays off the whole amount.

When the transferred item arrives, the Chief mate who’s under the captain’s supervision, would come in representation of the caption to compare the shipping order issued by the shipping company with the actual shipping and immediately after checking, it enters the dock. The document that proves the arrival and receiving of shipment is called mate’s receipt. The personnel in charge from the shipping company would check that the shipment has not suffered any damage of any kind, if any type of damage is discovered, the information is printed in the mate’s receipt, and then the foul B/L is issued.

Foreign equipment/goods that will be utilized in industrial facilities, or factory equipment, and the area where these will be used is known as the bonded construction building. This policy is applied to situations where a major construction plan purchases item for the projects, from materials, machinery. Etc or misassembled parts that are imported and not taxed immediately. When the parts become taxable upon construction, then it is properly charged. It helps the process to advanced rapidly by saving time and money, and whereas simplifies the process with the office of import certificates.

These are the ones that use, raw materials of domestic and international origin, to manufacture, or process their products. It refers to the place or area where the latter process takes place. Originally, a bonded factory refers to a place that bring materials from foreign lands, and in a bonded state, it is taken into the factory for processing or manufacturing jobs and immediately after the goods are sent out, as exported goods, this policy was created for the processed exports. Bonded factories can be divided into, one, that processes and manufactures goods to be exported, an exports only bonded factories’ and those that import the goods into the domestic market.

This makes reference to bonded items brought into the country and are transported. Domestically with the bonded transportation, it amplifies custom territory, and to prevent unlicensed operations, the sending address and destination address are limited, bonded areas, customs office, clearance area, etc allowing clearance and transportation between specific clearance areas, and if needed it also offers, collaterals.

When we talk about bonded display areas, we are making reference to exhibition areas, exhibits and sample fairs. For the operation of the latter areas, foreign goods are brought in to be displayed. According to related legislation (international customs) and because it is customary, the goods that are brought in to the country are tax free, and they are freely displayed for the public to see.

In order to bring foreign good for exhibition, the person who wishes to do so, must get a certificate, official documentation proving the customs office authorization to do so. The goods that are allowed to be brought in tax free are construction material, industrial items, exhibition items, sales items etc.

The place to store the items that need to be cleared with customs, is known as the bonded storage It doesn’t have the purpose of clearance yet storage duration is short. This place should be set up where there is a warehouse, and goods that need a special storage environment, container yard, open air storage yard for scrap iron, a timber yards are few examples of what is considered to be a bonded storage area.

The concept of bonded warehouse has been around for some time to boost the development of trading. The place where foreign goods are stored. At this place, the goods that arrive from foreign land are kept bonded, and from this area, they can be divided, and re-distributed to a third destination abroad

Transferring foreign goods to other countries or the area where tax free items are sold. These bonded shops are located at the departure area at airports, or at military bases, specifically in the foreign goods area, where foreign goods are sold to personnel, known as commissary.

In order to ship the goods, the dock or place designated by the shipping company needs to prove the shipment to the shipper/consigner and for this, a freight receipt is issued, especially with container shipments, if these go via CY or CFS , for conventional vessels a mate’s receipt is issued instead.

Partial shipments constitute not one, but more than two partial shipments that are shipped, from several different docks, but if the same sea route is used to arrive at the same destination, regardless of the number of shipments, it is not considered a partial shipment. According to the uniform customs and practice for documentary credits, article 40, unless there is a specific legislation, partial shipments are allowed. For partial shipments, if there’s a violation of any sort from one of the installments, deciding if this would affect the entire partial shipments or just the installment in question, as an independent contract, is important to add the following clause that says: "In case of shipment by installment, each shipment shall constitute a separate contract".

The uniform customs and practice for documentary credits defines shipment as loading on board, dispatch, accepted for carriage, date of post receipt, date of pick-up, taking in charge

Bill of lading is a marketable security that is issued by the shipping company under the contract of carriage by sea that is signed between the owner of shipment and the shipping company. The shipment is the one received by the shipping company from the owner of shipment, with the purpose of shipping services, therefore delivered to its port of discharge in exchange for the payment. When the consigner receives the mate’s receipt from the captain, and along with this the freight cost is cleared with the shipping company, then bill of lading will be issued. But with freight collect, there is no need for the previously mentioned process, and the bill of lading still can be issued, this even though the cargo has not arrived.

Straight B/L & order B/L
Straight B/L is an order that has clearly the name of the consignee written on it, the registered B/L is not used on import/export shipping, but for house-moving shipments or personal items. Therefore, since it is not distributed, there is no need for the shipper’s endorsement. If the B/L reads "Mr. Henry Brown", unless he had transferred his power to someone, it is useless to others. But the shipping company, without a B/L would transfer the shipment as long as they can check it’s "Mr. Henry Brown". The order B/L, doesn’t have a name written on it, simply it would read: "to order", "to order of shipper", "to order of bank", which means it has the purpose of distribution. In trading, as a principle, the order B/L is used. The name of the importer and address is clearly written no on the order B/L but on the notify B/L. The importer, in order to pick up the delivery order from the shipping company’s office, Needs to show the original copy of bill of lading. If the shipment is addressed to a third party designated by the importer, the latter needs to endorse the named consignee or order. For imports, only the order B/L’s are accepted, in order to use in business, to transfer or to sell a bill of lading. The one that possess the B/S becomes the owner of shipment. The order B/L’s structure is as follows:

① To order or to order of shipper: This is the most commonly used one, the importer needs the endorsed order to pick up the shipment. At the bank as well, it needs the bill of lading that has been endorsed by the seller, which can be used as a collateral.
② To order of (negotiating bank): For banks to get into negotiations, the letter of promise needs to be endorse, and therefore it can be used as a collateral, the shipment is sent to the bank’s designated person. But under exports, endorsements are not possible, therefore it loses power over the shipment.
③ To order of (collecting bank): The collecting bank for the letter of promise, it is the one that endorses it, and the shipment is sent to the designated person by the bank. The exporter and the bank from the exported location, would lose power and can’t be endorsed. The latter bank cannot see it as a collateral. If the collecting bank isn’t their regular bank, then, they wouldn’t respond to negotiations.

The requirements certification is, the standard amount of manufacturing date, the real quantity needed for processing, and the damaging rate that might occur during the process. Standard requirements certification, is in other words, the raw materials, with item categories, sorted by size, the unit and standard amount (real quantity unit and standard requirements), which are the materials needed for exporting. Therefore, the requirements certification, is used for exporting raw materials, or domestically, financial exports, tax refund, after-service etc.
In order to measure accurately the requirements by the measuring entity: ① Inspection of area, ② documentary survey, ③ Inspection of actual item and inspection of catalogs ④ the inspection based on the submitted item list by the requesting party ⑤ Similar items requirements, application of requirements certification. When the requirements are measured by unit: ① Manufacturing process and process chart, ② damaging rate by process and the origins/reasons for it, damage status and cause of damage, ③ raw materials, combination percentage, the minimum of what’s needed is inspected.

It is a way for the seller to prove to the buyer, that everything is in accordance to the agreement, it contains the items list, pricing and the similar are accurately shown. Especially the commercial invoice, is evidence that there is a trade business going on, as well as confirming the accuracy and legitimacy of items exported. This is why it is an essential document for business. According to the uniform customs and practice of documentary credits, the commercial invoice needs to be ① Filled out for the applicant ② the amount stated in the letter of credit can’t be exceeded. ③ the items listed here needs to accurately match the ones listed on the letter of credit.

The receiver of the letter of credit is known as the beneficiary, or the receiver, when the exporter releases a letter of credit the receiver becomes the beneficiary. But the beneficiary can also be known as the exporter, shipper, drawer, payee, accredited, addressee user. Under the transferable letter of credit, the original beneficiary is known as the recipient (sole beneficiary) and the person receiving the transferred powers is known as the secondary beneficiary.

An import agency is, when a subject that doesn’t have an importing/trading license, receives a letter of credit domestically and imports the products, signs an agreement with the agency so all the importing procedures can be done in the name of the agency. There are no limitations towards the applicant requesting the services of an import agency unless there is a special regulation or the similar limiting importing business in general.

Types of import agency
(1) The importing of Raw materials for exports are possible when the person requesting for the agency’s service has received a domestic letter of credit, or when they are not registered importers, and in order to purchase the materials needed for business, needs to use the name of the importing agency to conduct business. In other words, the subject isn’t able to conduct importing business without a license and therefore needs to use the name of the person or legal person who is licensed to conduct import business, to do so. But, according to the exportation and importation policies, the collection of customs, delay and refund of taxes, financial support are not offered to the importing agencies either.
(2) The imported goods through the importing agency, can be divided into one where, the consignor’s imports the materials to manufacture goods, or to sell the goods directly and where the imported goods are for personal use.

Export agencies are when the individual seeking the service, receives a letter of credit from his counterpart overseas, buyer, or has signed a business agreement, but under his name the export is not possible without a license. Under the letter of credit, for exports, in order to have an export agency conducting business, the letter of credit needs to be a transferable credit. In other words, after the contract is signed between the seller and the export agency, the seller needs to transfer the rights to the letter of credit to the agency.

Type of export agencies
(1) Standard: Simply borrowing the name of the agency in order to conduct exporting business where all the procedures as performed by the subject requesting the agencies service.
(2) Financial support: where the agency uses its name to get a loan for the subject requesting the service, where the agency is also in charge of all process, even the shipping process. Therefore, the subject that requested the service would only need to manufacture/process the goods and supply. The service fee is the most expensive one, and the interest that is produced through the loan, shall be covered by the subject requesting the agency’s service.
(3) Method of local credit issuance. When the subject requesting the export agency service, transfers the powers of the letter of credit to the agency, and with this, the items to be manufactures and process for exporting purposes, will be provided to the agency, and the rest shall be discussed and agreed by both parties and then it shall be used to continue business. The other different procedures in regard to this trading part is that both parties will be in compliance to the agreement they have signed.
(4) Directly receiving the letter of credit. This is where the exporter would sign a contract with the international company, using his own name, whereas the letter of credit is issued under the agency’s name. The convenience with this method is that the transferring process is not needed. In this case,
(5) In this case, the subject requesting the service from the agency, offers the exporting items, then depending on the agreement signed by the involved parties, the negotiations are officially running, but if the service requesting party. Only take the middle man role, without supplying the goods, then their relationships, we say is based on export agencies.

The export insurance, is when the financial institution that had offered the funds, guarantees the exporter, before and after shipping, the payment of goods (through government contribution/donation) when the importer is deemed to be not eligible to do so, be with due to bankruptcy, the economic status of the country receiving the goods, policy drafting in regard to the foreign transfers, socio political chaos, wars etc. The government donation in turn is to boost exports based on export promotion policy, in other words, it can be considered a non -profit insurance policy The export insurance business is under the supervision of the government’s department of commerce industry, managed by Korea exports and Insurance public corporation.

The export credit insurance is a type of insurance that protects D/A, D/P or else, those that are not considered to be a method of letter of credit, after the exporter has exported the goods, and the purchased bill of exchange has expired, the importer has not clear the bill, and therefore the exporter is in the verge of bankruptcy, therefore this insurance aims to protect the bank that has sponsored the exporter.

The export credit guarantee, is the collateral to a midsize exporting company that the bank keeps, in regard to export contracts, against the loan. In other words, it is the guarantee provided by the Korea Export Insurance Corporation in a joint surety over the exporter’s debt. So, if the importer does not clear the bill (no payment) then the Korea Export Insurance Corporation will pay out the whole amount to the bank, keeping the bank safe and making sure that it continues offering the financial trading services. This system has been created for midsize exporting companies, without requesting a collateral, so they can conduct their exporting business confidently. The big corporations are not beneficiaries of this policy system.

A letter of credit is a guarantee for payment and shipment arrival, in which the importer’s bank, as per the importer’s request, sets the boundaries for the term, conditions of the negotiation and keeps the transport document as a collateral. The importing party’s opening bank and designated administering bank for exchange transaction are ordered to issue a documentary draft, that proves the letter of credit has been given, the issuer of the letter of credit and the receiver of the letter of credit etc. In other words, a letter of credit guarantees the ability to pay, which is switched into trade credit, commercial credit, and bank credit.

(1) Sight credit & usance creditA sight L/C requires the buyer to make payment once the documents have been presented and everything has been verified by the issuing bank .In other words ,payment must be made at sight. A usance credit L/C requires the buyer to make payment by a specified future date (and upon of conforming document).In effect the buyer is extended a specified period of credit Please note that the term usance is not specifically referenced in UCP600,where it states “ aA credit must state whether it is available by sight payment, deferred payment, acceptance or negotiation
(2)Transferable versus Non-transferable Letters of Credit In a transferable letter of credit, the first beneficiary (the exporter) may request the paying, accepting or negotiating bank to make the credit available in whole or in part to one or more second beneficiary. The second beneficiary can be an export-manufacturer or an export-trader. The L/C is expressly designated "transferable" by the issuing bank on instructions of the applicant. In a non-transferable letter of credit, the beneficiary cannot transfer the credit to other beneficiary.
It is transferable when: . ① Only the negotiating bank is able to deal with the transfers ② The L/C indicates " transferable" ③ It Is transferable only under the negotiating bank’s conditions. ④ Those that are transferable, can only be transferred once. Unless there is a prohibition towards installment shipping, one installment is once as well. ⑤ The amount stated on the letter of credit and the price for unit (as stated on the original), expiration date, shipping documents, none of these information can be altered for transfer.
(3) Irrevocable credit vs revocable credit Revocable letter of credit can be modified or cancelled by the issuing bank after its issuance at any moment without seeking the beneficiary's consent. Issuing bank must reimburse any nominated or confirming bank with which the revocable letter of credit has been made available .A revocable letter of credit can serve as a limited security payment method to the beneficiaries because they are subject to amendment or cancellation without their prior knowledge. As a result revocable letters of credit are not used frequently in international trade. UCP 500,which is the previous letters of credit rules published by ICC, was indicated that a letter of credit may be either revocable or irrevocable. UCP 500 assumed that a letter of credit is irrevocable in default of the indication whether it is revocable or irrevocable. Irrevocable Letter Of Credit is a letter of credit type which can not be cancelled or amended by the issuing bank without the agreement of the parties of the letter of credit transaction.
(4) Confirmed credit & unconfirmed credit When the Letter of credit is guaranteed by adding payment confirmation by the advising bank or any third bank on behalf of the opening bank, it is termed as a confirmed LC otherwise it is an unconfirmed LC. The confirming bank also becomes a party to the contract of LC after confirming it. A confirmed LC is preferred when the beneficiary is not able to ensure payment surety from the issuing bank and or have less faith on it.
(5) Straight versus Negotiation credit . A negotiation letter of credit can be presented to any bank. Documentary credit where the issuer expressly indicates the credit is available by negotiation, or where its issuer's obligation extends to its drawers, endorsers, and bona fide holder for value for drafts drawn under it. Erroneously also called negotiable credit. A straight credit can only be paid at the counters of the paying bank or a named drawee bank that has been authorized to make payment. Payment can only be made to the beneficiary named in the letter of credit, and not to an intermediary or negotiating bank.
(6) Documentary credit vs Clean credit International trade procedure in which the credit worthiness of an importer is substituted by the guaranty of a bank for a specific transaction. Under documentary credit arrangement (also called letter of credit arrangement) a bank (usually in the importer's country) undertakes to pay for a shipment, provided the exporter submits the required documents. Clean credit is an L/C that does not require any document other than a written demand for payment by its beneficiary. In effect, a draft.

Documentation standards defined by the International Chamber Of Commerce (ICC) in 1933 and revised periodically thereafter. These standards are followed by practically every organization involved in foreign trade and (when not in contravention of local laws) are binding on all parties using letters of credit. Also called uniform customs and practice for documentary credit (UCP). Unless otherwise expressly stated herein, this credit is subject to the "Uniform Customs and Practice for Documentary Credits. International Chamber of Commerce Publication No. 500" From that we can understand that all letters of credit are governed by a common group of norms yet in terms of the items, or the specific negotiations between parties are not governed by it but separate private agreements that parties sign prior to their business dealings.

Under transferable letter of credit, exporter can transfer the credit fully or partly to one or more parties. This is possible when the credit clearly states it is "transferable" (no other term is acceptable). In cases, when the product is to be fabricated by a third party, fully or partly, a portion of the credit is made transferable to the third party. Such transfer of credit must be informed to the issuing bank. It is used when the seller is a middleman who can transfer a part of the credit to the exporter for shipping the goods. When the credit is not transferable, it is non-transferable credit.
 ① Only the negotiating bank is entitled to transfer credits, that governs payments and others.
 ② The letter of credit clearly needs to say that is transferable
 ③ It can only be transferred under the terms and conditions dictated by the transferable bank.
 ④ It can only be transferred one time. If the shipment does not prohibit installment shipments then one installment is considered one time transfer.
 ⑤ On the letter of credit, the pricing, expiration dates and all the detailed informed shall be the same one as on the original one.

A Certificate of Origin (CO) is an important international trade document that certifies that goods in a particular export shipment are wholly obtained, produced, manufactured or processed in a particular country. They also serve as a declaration by the exporter. Virtually every country in the world considers the origin of imported goods when determining the duty that will be applied or, in some cases, whether the goods may be legally imported at all.
Country of Origin
Country of origin (COO), is the country of manufacture, production, or growth where an article or product comes from. There are differing rules of origin under various national laws and international treaties. Therefore, packing, installments. All the minimal tasks, even though the items have been processed, composition, contents, features, the changes that were made if they can’t change the basic features of the product, they can’t considered decisive factors in deciding the country of origin.

A bank in a country to which another bank sends a letter of credit on behalf of a client. The accepting bank honors the letter of credit and transfers requested funds to the client. This is similar to an advising bank, though the latter term refers exclusively to a bank in different country; an accepting bank may be (but is not necessarily) in the domestic country.

At sight is a payment due on demand. An at sight payment will require the party receiving the good or service to pay a certain sum immediately upon being presented with the bill of exchange.

A paying bank, is a bank on which a check or draft is drawn; the bank which cashes it. Also called accepting bank, drawee bank, or payer bank. The bank designated in a letter of credit as the party that will honour drafts drawn under the L/C. Paying banks are the ones in charge of paying out the straight credits.

If storing items in bonded areas is not possible for some reason, then licensing or permit for alternative storage area use is needed. Then after this permission is granted, only in these areas they are possible to store their items. When there is need to extend the use of this area, then the permission should be requested for an additional permit or license for usage.

Example of shipment that would need this type of storage.
 ① A massively big shipment
 ② Shipment that needs storage due to natural disaster or any other unfortunate event.
 ③ quarantined items,
 ④ confiscated items
 ⑤ postal items

Customs clearance work involves preparation and submission of documentations required to facilitate export or imports into the country, representing client during customs examination, assessment, payment of duty and co taking delivery of cargo from customs after clearance along with documents.

It can be classified into two different lines, the main one and the subsidiary one. The items that are to be exported or imported, shall occur at designated areas yet depending on the type of item, meaning dangerous or not, for example it would have a special designated area for storage. In some cases, the places where the inspection occurs are not the appropriate one for certain items, if that’s the case, we call this is process the dispatch conditioning,

The appropriate measures necessary to ensure safety and ease of transport. In order to make certain that the handlers are able to identify the shipment it is crucial to provide shipping marks which show the handler what type of product is present within the carton or cardboard box used to pack the materials.
① Main mark helps to differentiate shipments, comes in triangle shapes, diamond, square, diamond truss, etc and inside there is an abbreviation of the
    brand
② Counter mark: in case the main marks are the same, it’ll help differentiate even more
③ Quality mark, will show the quality of contents.
④ Weight mark: shows the content’s weight
⑤ Port mark: shows the destination port
⑥ Case number: when packing is separate, each pack has a number
⑦ Country of origin mark: country where it was produced, ex. Made in Korea.
⑧ Caution mark: when being transported, moved, the cautions handlers need to be aware NO HOOKS, WITH CARE KEEP DRY, THIS SIDE UP, OPEN HERE
     FRAGILE
⑨ Attention mark : order number for convenience

Type of bill of lading that serves as a (1) receipt of goods by an airline (carrier) and (2) as a contract of carriage between the shipper and the carrier. It includes (a) conditions of carriage that define (among other terms and conditions) the carrier's limits of liability and claims procedures, (b) a description of the goods, and (c) applicable charges. The airline industry has adopted a standard format for AWB which is used throughout the world for both domestic and international traffic. Unlike a bill of lading, an AWB is a non-negotiable instrument, does not specify on which flight the shipment will be sent, or when it will reach its destination.
A freight forwarder offering a consolidation service, will issue its own air waybill or bill of lading. This is called a Forwarder's or House AWB with its equivalent House BL. These act as contracts of carriage between the shipper and the forwarder, who in this case becomes a Deemed Carrier. The forwarder in turn enters into contracts with one or more carriers, often using more than one mode of transportation. The contract of carriage between the forwarder and carrier is called a Master Air Waybill (MAWB or MBL). A House Air Waybill (HAWB) or Bill of Lading (HBL) could act as a multimodal transport document box used to pack the materials.

Comparing Air Way bill and bill of lading
① Airway bill is issued by air carrier of goods on receipt of goods after completion of export customs formalities of the country. Shipper obtains airway bill once after handing over cargo to them. Since the cargo reaches by air and transit time is too less compared to sea shipment, a set of airway bill is sent along with the cargo for immediate reference on transit and for import customs clearance at destination port by importer. Original airway bills are issued in quintuplicate which is meant for carrier, importer, shipper and additional copies.
② Once after completion of customs formalities at load port customs location, cargo transfer manifest (CTM) issued by IATA agent along with airway bill and other required documents for transportation submits to air carriers.
③ Importer may also collect copies of documents by courier or mail from shipper before arrival of goods.
④ Once after arrival of cargo at destination, the importer or his cargo agent approaches the destination office of air carrier and collect airway bill and other required documents sent by shipper along with cargo for necessary documentation for import customs clearance procedures and other references. Importer may also collect copies of documents by courier or mail from shipper before arrival of goods.

A simple definition of the word insurance would be “Protection against future loss.” Marine insurance is another variant of the general term ‘insurance’ and as the name suggests is provided to ships, boats and most importantly, the cargo that is carried in them. Marine insurance is very important because through marine insurance, ship owners and transporters can be sure of claiming damages especially considering the mode of transportation used. Of the four modes of transport – road, rail, air and water – it is the latter most which causes a lot of worry to the transporters not only because there are natural occurrences which have the potential to harm the cargo and the vessel but also other incidents and attributes which could cause a huge loss in the financial casket of the transporter and the shipping corporation.

It is one of the services offered by the bank as Advising Bank similar to L/C opening / amendment service allowing convenience for the customer (beneficiary) to open / amend international agent bank’s Letter of Guarantee or Standby L/C in a short time.
Customers who operate business with international partner that requires L/G or Standby L/C to guarantee the agreed business can open / amend L/G or Standby L/C for the customer (beneficiary) within 24 hours. Such L/G or Standby L/C will be inspected whether it is a real document from the international bank.
After receiving Letter of Guarantee: L/G or Standby L/C from the international agent bank to guarantee for the beneficiary the bank will notify the beneficiary by L/G or Standby L/C to receive the said L/G or Standby L/C without being bound with the L/G.
So after the issuance of the L/G from the bank, it is submitted then to the shipping company, and this in turn, will issue a deliver order D/O to the other party, and the shipment can be retrieved from the main line or warehouse.

A delivery order (abbreviated D/O[1]) is a document from a consignee, or an owner or his agent of freight carrier which orders the release of the transportation of cargo to another party.Usually the written order permits the direct delivery of goods to a warehouseman, carrier or other person who in the course of their ordinary business issues warehouse receipts or bills of lading.
According to the Uniform Commercial Code (UCC) a delivery order refers to an "order given by an owner of goods to a person in possession of them (the carrier or warehouseman) directing that person to deliver the goods to a person named in the order."
A delivery order which is used for the import of cargo should not to be confused with delivery instructions. Delivery Instructions provides "specific information to the inland carrier concerning the arrangement made by the forwarder to deliver the merchandise to the particular pier or steamship line."

In international trading, a bill of exchange or commercial draft (documentary bill of exchange with letter of credit) that is presented for payment with the required documents such as a clean bill of lading, certificate of insurance, certificate of origin. Also called documentary draft. (bill of documentary collection)
① documentary bill of exchange with letter of credit: Bill of exchange which is also known as draft is a tool commonly used in international trade transactions. Bill of exchange can be used as a supporting financial document in cash against document and letter of credit payments. (documentary bill of exchange with letter of credit)
② Bill of Documentary Collection
A documentary collection is a process in which the seller instructs his bank to forward documents related to the export of goods to the buyer's bank with a request to present these documents to the buyer for payment, indicating when and on what conditions these documents can be released to the buyer. The buyer may obtain possession of goods and clear them through customs, if the buyer has the shipping documents (original bill of lading, certificate of origin, etc.). The documents, however, are only released to the buyer after payment has been made ("Documents against Payment") or payment undertaking has been given - the buyer has accepted a bill of exchange issued by the seller and payable at a certain date in the future (maturity date) ("Documents against Acceptance").
Documentary Collections facilitate import/export operations. They do not provide the same level of security as Letters of Credit, but, as a result, the costs are lower. Unlike the Letters of Credit, for a Documentary Collection the bank acts as a channel for the documents but does not issue any payment covenants (does not guarantee payment). The bank that has received a documentary collection may debit the buyer's account and make payment only if authorized by the buyer.
Arrival Bill : After the shipment has arrived at its destination, and after the inspection, the shipping documents are given back and later on the payment is made.

Documentary Credit, is a written commitment by a bank issued after a request by an importer (foreign buyer) that payment will be made to the beneficiary (exporter) provided that the terms and conditions stated in the LC been met, as evidenced by the presentation of specified documents.

The confirmed credit is known as a notion where apart from the opening bank, a third party bank, as per the request of the latter, releases payment, or issuance of transfer, based on the letter of credit existent without the LC it is known as the unconfirmed credit,.

The third party apart from the opening bank that had issued the letter of credit, the additional promises, with the guarantee that the opening bank will pay, are done by this type of bank. So when these provisions are checked, then these are called the confirming bank

Transshipment refers to when after leaving the departure dock, and in the way to the destination dock, the shipment is moved or transferred to a third-party vessel or a different way of transportation, the viability of transshipment needs to be clearly mentioned in the agreement, the uniform customs and practice for documentary credits has separate policies in regard to transshipment. Unless transshipment is clearly prohibited, it shall be considered that transshipment is to occur.