Re: sALudos, nota de credito and letter of credit

[Paul S. <zi...@su...>]

Please do not mix the terms:

"nota de credito" translates to "credit note" and is actually an "I owe you"

"Letter of Credit" which is the payment term L/C, normally used with the 
additions of "confirmed" and "irrevocable". Letter of Credits are used 
mainly in foreign trade when the seller wants to be sure to obtain the 
payment for the goods or services delivered. A synonym for L/C is 
rembourse.
When the payment term L/C is used as payment term the proceedings are 
basicly the  following:
- The buyer approaches his bank
- the bank grants a credit to the buyer and informs the bank of the 
seller that such a credit has been granted (confirmed meaning informing 
the seller's bank and  irrevocable meaning basicly that the buyer cannot 
cancel the transaction or credit)
- the seller's bank informs the seller that a L/C has been opened
- the seller presents proof that the terms of sales have been met 
(usually by handing over shipping documents and change of title 
documents, i.e ownership docs)
- seller's bank once satisfied that tems of sale have been met releases 
the money to the seller
- seller's bank sends shipping and ownership documents to buyer's bank
- buyer's bank hands over documents to buyer

As noticed from above L/Cs are banking instruments, pretty complicated 
and thus expensive.


Paul