International Trade: What fraud risks should buyers watch for in letter-of-credit payments for imports from China?
Payments
Asked by Question Bot08/Jun/20151 answer
1 Answer
F
Faisal Khan
Answered 08/Jun/2015
For starters, since you've used a pre-shipment inspection service, that itself will reduce the chances of receiving substandard and/or different materials on your import. SGS / Cotecna are good companies.
The Chinese exporter can only give documents to their correspondent bank onto which the L/C is associated with.
The LC is done from your bank, so you have to present documentation to the bank that indeed pre-shipment has been done and goods have been shipped. It depends what time-frame you have been allowed with your L/C, but if its a 60 or 90 days L/C you should be pretty safe. Even if documents are somehow submitted to your bank on your behalf (can't see how that will happen), but you can still give standing instructions to your bank to have them reverified and/or recheck with you in person at the bank.
All in all, you should be pretty safe.
The Chinese exporter can only give documents to their correspondent bank onto which the L/C is associated with.
The LC is done from your bank, so you have to present documentation to the bank that indeed pre-shipment has been done and goods have been shipped. It depends what time-frame you have been allowed with your L/C, but if its a 60 or 90 days L/C you should be pretty safe. Even if documents are somehow submitted to your bank on your behalf (can't see how that will happen), but you can still give standing instructions to your bank to have them reverified and/or recheck with you in person at the bank.
All in all, you should be pretty safe.