A letter of Credit is basically a document that is issued by a financial institution. It provides an irrevocable payment undertaking to a beneficiary against complying documents as stated in Letter of Credit. On the other hand a CAD or Cash against Documents is a kind of transaction where the buyer assumes the title for goods that are being purchases on payment of sale price in cash.
Letter of Credit Terms and Conditions: For payment by Letter of Credit, please have your bank issue an Irrevocable Letter of Credit (L/C) according to the following terms and conditions. Please note: We recommend that you fax us a draft of your bank's L/C or your L/C application, for us to review the L/C for acceptability before your bank finalizes it. This may save everyone time and possible amendment costs. Beneficiary: Wastech Controls & Engineering Inc. 9305 Eton Ave, Chatsworth, CA 91311, USA Total amount: As quoted to you in our official price quotation. Payable: In US Dollars 100% at Sight. Validity for shipment and negotiation: 90 days from receipt of L/C at Wastech Controls. Partial shipments: Allowed. Transshipment: Allowed. Incoterm: If you specify an Incoterm in your L/C, it must agree with the Incoterm stated in our official quotation. Wastech Controls requires CIP or CIF terms for L/C shipments. Shipment from port/airport: If you specify a ship from port or airport in your L/C, it must be the USA port or airport stated in our official quotation. Port/airport of destination: If you specify a port or airport of destination, it must be the port or airport stated in your official quotation, and it must be an international point of import in your country. All banking charges inside and outside the USA to be paid by you. All Letter of Credit Amendment fees inside and outside the USA to be paid by you. All duties, customs fees, taxes, inspection fees and other cost to be paid by you. Advising and Confirming: Letter of Credit to be advised and confirmed through a bank in USA and to be negotiable and payable at a bank in USA. Forwarder: Wastech Controls reserves the right to nominate the export forwarder. You may specify a certain airline and your import agent at time of quoting. Please follow these instructions to ensure prompt processing of your order. If you cannot meet any of these terms and conditions, please notify us immediately to see whether a change is possible. Please ensure that the Letter of Credit is received by us in sufficient time for review and acceptance before our agreed upon shipment date. Thank you for your cooperation. If you or your bank have any questions, please contact our office. Cash Against Documents (CAD): Under CAD terms, you - the customer - appoint your bank as consignee for the shipment and as paying agent. Customers and their appointed bank have to be approved by Wastech Controls for CAD terms prior to shipment. CAD terms are not available to all countries. When you place your purchase order with Wastech Controls: 1.In your purchase order, name the bank you will be using, including the bank's full street address (not a P.O. Box), city and postal code, telephone number, fax number and contact person or department at the bank . The bank must be in the same country that the shipment is going to, ideally at a location close to the airport/port at which the shipment is arriving, so that there is no long delay for transferring the freight papers from the bank to you or your import agent. When Wastech Controls ships your order under CAD terms: 1. We will ship through a freight forwarder appointed by Wastech Controls. 2. The shipment will be insured through Wastech Controls. 3. The freight forwarder will consign the shipment to the bank, meaning the Air Waybill or Ocean B/L is made out to the bank. 4. The freight papers (Waybill, Draft and Invoice) will be sent by our forwarder separately from the freight by courier directly to the bank for payment. 5. As soon as the bank receives the freight papers, they have to accept the Draft and effect payment. Payment of the full invoice amount is due in US Dollars upon receipt of the freight papers, by wire transfer to the bank stated on the Draft. 6. Upon acceptance of the draft, the bank must release the freight papers to you, so that you can pick up the shipment from customs, or you can hand the papers to your import agent to clear the shipment from customs for you. Please be aware that: 1. Because the freight and the freight papers are sent separately, there will be a delay for you to receive the shipment from customs. The freight papers go out by courier on the business day following the day of shipment and take 2-3 business days to reach the bank. 2. Your bank must be familiar with this process, and assure you that they will promptly take care of processing the draft, and release and send the papers to you, so that you (or your import agent) can obtain the shipment from customs. 3. Your bank must be fully informed by you about the upcoming CAD and have funds available. 4. Please make sure your staff that handles the CAD shipment is familiar with this process.
