Language Focus A Terms of payment
Follow-up Practice
Listen to the dialogue about the opening of an L/C between Linda Jones, the accountant with Italian BAK Export and Import Co., and Brian Martin, a bank clerk. Then choose the correct answer to each question.
对话文本：
Brian: Good morning. What can I do for you?
Linda: Good morning. I'm from Italian BAK Export and Import. I'm here to open an L/C.
Brian: Great. I'm sure we can help. What kind of L/C would you like?
Linda: Well, to be frank, I don't know much about L/Cs. I've just joined this company and am taking charge of exports and imports. We've just signed a contract with a Chinese company for a relatively large order of 100,000 tons of cotton. It's quite a big order for us.
Brian: Congratulations. That's really no small deal. Will you be making partial shipments or…?
Linda: Oh, yes. The agreement is to make five consecutive shipments. But as you can see, it involves a huge sum of money. Naturally, our manager is worried about coming up with such a large sum of money in such a short period of time.
Brian: I see. Under these circumstances, I suggest that you pay via a revolving letter of credit. This way only one fifth of the total amount will be required each time.
Linda: Revolving L/C? What's that?
Brian: A revolving L/C is a letter of credit under which the amount is renewed without specific amendment. It's regarded by many as very convenient, especially in situations where there are regular shipments of the same types of goods.
Linda: Oh really? Then that seems to suit our case very well. Does it mean we can open an L/C to pay our first installment and when the second shipment is ready, the same revolving L/C works again and continues until the last shipment?
Brian: Exactly. With a revolving L/C, the amount of the credit will be automatically reinstated after a drawing or after a specific period. In addition, you won't be bothered with repetitious arrangements for opening, checking and amending the documentation.
Linda: Perfect! Thank you so much for all your help and your suggestion. I'll go back and confirm with my head and the Chinese company. Then I'll come to you again, OK?
Brian: All right. Here's some information about how to open a revolving L/C. You can take it with you.
Linda: Thanks. See you later.
