For settlement by letter of credit, after the letter of credit is issued and arrives at the bank of the exporter (beneficiary of the letter of credit), the bank will make a notification and transfer the letter of credit together with the notification to the exporter. The specific operation of the letter of credit will be discussed in the next chapter.
In addition, in practice, other documents may occasionally be seen, such as:
Customs Invoice
Customs Invoice is a document issued by the exporter at the request of the customs of the importing country. The basic content is similar to that of an ordinary commercial invoice. Its format is generally formulated and provided by the customs of the importing country. It is mainly used for customs statistics, verification of origin, and verification of the price composition of imported goods in the importing country. Its format can be downloaded from the official website of the customs of various countries.
Consular Invoice
A specially printed invoice issued by the consul of the importing country in the exporting country. This invoice proves the details of the exported goods and is used by the importing country to prevent the low-price dumping of foreign goods. It can also be used as the basis for calculating import taxes, which helps the goods pass through the customs of the importing country smoothly. When issuing a consular invoice, the consulate generally charges a certain fee based on the value of the imported goods. This type of invoice is mainly used by Latin American countries.
Draft
A draft is an instruction issued by the drawee to pay a certain amount of money unconditionally to the designated payee at the agreed payment period (immediate or forward). It usually appears in the operation of letters of credit, with the bank providing a blank bill, the exporter filling it out, and the payee signing to confirm the payment.