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learn lesson from L/C (PART 2)


Chinese suppliers are easier to be cheated.

Mainly because guests think that others always would do if you do not do it. The article of an Italian fraud that was shared by a predecessor has also mentioned similar problems. Many suppliers have been deceived and still don’t figure it out. In fact, the main reason is that many factory owners do not understand cumbersome operating procedures of L/C or O / A, and there will be no dedicated personnel to study it. 

So the scammers often succeed. MUNECAS SAICA S.L.is very good at it and has a good relationship with the bank. Every article of L/C has been carefully studied, which is why they can handle it.


L/C is actually the easiest and most convenient way to operate. All things are clearly stated in the text.

The complexity lies in the review of the issuing bank. The foreign financial industry is very developed, so many of them are small banks. All the interests of the customers are the highest standards, and naturally, our interests will be impaired.

Investigating the credibility of customers and their issuing banks well is vital in the early days. For some letters of credit in countries and regions with low credibility, it is best not to accept them but directly request TT.

The last precaution is to ensure in the CITIC Insurance. If there is a real problem of refusal to pay, 90% of the value will be paid by CITIC Insurance. Followed by the government, it will come forward to negotiate with the local government to recover the purchase price. Moreover, the insured premium is a piece of a cake in the face of the value of the goods, paying a deposit of 10,000 Yuan and a few hundred pieces of premiums for each shipment will cost a lot of money. The most important thing is that they can conduct credit investigations on customers. If there are really many bad records, they will notify you directly and remind you to prevent them.

Experts’ advice:

In the case of L/C, the company must first investigate the company's information, and its issuing bank swift allows your bank to investigate the credit situation. Secondly, let the customer send a draft L/C to review the terms; if there is a soft clause or others, do not accept. Finally, do not accept if it refers to the third-party test results as delivery documents.

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