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Buyer (or Buyer's Agent) requests for a quotation on a product.
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With the request is a letter of intent (LOI) to buy stating exactly what you want with full details and specifications for product, quantity, packing, destination, special instruction, target price, etc. |
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Buyer send an irrevocable corporate purchase order (ICPO). This states full details of his order as in the proforma invoice and must contain your full bank contact information including name of bank, address, phone and fax, name of account, number of account, name of an officer at that bank who can verify his funds. The ICPO also contains a sentence gving permission for a soft probe of his account, the ICPO must be on the corporate letterhead, and usually begins with the phrase...With full corporate responsibility.... |
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The seller contacts bank for soft probe to prove buyer's ability to provide funds. |
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Buyer and seller signs sales contract. |
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PRE-ADVISE LETTER OF CREDIT (L/C) |
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Buyer supplies pre-advise letter of credit (L/C). This is like a draft and is the first page of the letter of credit. It is an outline of everything in the proforma invoice and L/C. It allows the seller to review the L/C to be certain that everything is included correctly. |
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OPENING OF THE LETTER OF CREDIT (L/C) |
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PAYMENT OF L/C IS MADE WHEN DOCUMENTS ARE PRESENTED AT BUYER'S BANK. |
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