Unit 7. Systems of Payment. Letter of Credit

I. Remember the words:

- payment - платіж

- payment in advance - попередня оплата

- to assure - завіряти, запевняти

- settlement of the account - сплата рахунку

- outstanding amount (sum) - заборгована сума

- to remit - переказувати (гроші)

- remittance - переказ (грошовий)

- banker’s transfer - банківський переказ

- invoice - рахунок-фактура

- Certificate of Quality - сертифікат якості

- Insurance Policy Certificate - страховий поліс

- ATM - банкомат

- Letter of Credit - акредитив

- irrevocable LC - безвідкличний акредитив

II. Study the following sentences:

1. We have pleasure in enclosing our check for $500. – Із задоволенням додаємо наш чек на 500 доларів.

2. Lloyds Bank will accept your draft. – Ллойдз банк прийме ваш вексель.

3. We have opened LC with Lloyds Bank. – Ми відкрили акредитив через Ллойдз банк.

4. May we again remind you that this account is still overdue. – Дозвольте ще раз нагадати вам, що цей рахунок все ще не оплачений.

5. We must insist on receiving payment by 31^st January; failing this we shall be compelled to take legal action. – Ми наполягаємо на отриманні платежу до 31 січня; якщо цього не відбудеться, ми будемо змушені звернутися до суду.

6. Would you allow me to postpone settlement of your account? – Просимо дозволити нам затримати оплату вашого рахунку.

III. Read and translate the text:

Letters of Credit

Bruce Stevens of Harbour Imports Ltd, Melbourne, Australia, wanted to pay Peter Weaver of Clothco Ltd, Manchester, UK, for some cloth. Bruce wrote to his bank on a special form and asked them to open an irrevocable documentary credit. This is a Letter of Credit from Bruce’s bank guaranteeing payment in Britain at a later date. If it is irrevocable, it can not be cancelled. Neither Bruce nor his bank can change their minds and refuse to pay. Peter’s bank knows Bruce’s bank very well and they know they will receive the money, so they confirmed the Letter of Credit. This means that they guaranteed to pay the money so Peter was sure he would be paid. However a Letter of Credit is not negotiable, so Peter had to wait until the Letter of Credit was paid before he received his money.

IV. Answer the questions to the text:

1. Was Peter paid immediately for the cloth?

2. Who applies for a LC, the importer or the exporter?

3. Who issues a LC?

4. If a LC is not irrevocable, who might not pay?

5. If a LC is not confirmed, who might not pay?

V. Translate the sentences into English:

1. Метод платежу залежить від багатьох факторів.

2. В міжнародній торгівлі виникає ряд додаткових проблем.

3. Постачання за кордон та оплата товару займають більше часу, ніж на внутрішньому ринку.

4. Форма оплати залежить від умов, які були підписані в контракті.

5. Існує кілька основних методів платежу.

6. Складність проблеми пояснюється відсутністю фінансів.

7. Проект коштував дуже дорого, і тому адміністрація не поспішала з прийняттям рішення.

VI. Read the text and make up questions:

Compared to selling in domestic market, selling abroad may create extra problems. Delivery generally takes longer and payment for goods correspondingly can take more time. So exporters need to take extra care in ensuring that prospective customers are reliable payers and payment is received as quickly as possible. Payment for exports depends on conditions outlined in the commercial contract with a foreign buyer. There are internationally accepted terms designed to avoid confusion about costs and price. The way exporters choose to be paid depends on a number of factors; the usual contract terms adopted in an overseas buyer’s country, what competitors may be offering, how quickly funds are needed, the life of product, market and exchange regulations, the availability of foreign currency to the buyer and of course, whether the cost of any credit can be afforded by the buyer or the exporter.

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