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An establishment of irrevocable letter

Yoon: I hope that the payment will be made on sight under an Irrevocable Letter of Credit.

Jackson: Well, we are thinking of posting a draft 60 days after sight under an establishment of
An Irrevocable Letter of Credit. I think it’s the best that I can do.
Yoon: Actually, since a 6% discount is an unusual case, we cannot accept a draft 60 days after sight.
How about 30 days after sight? I think this is a fair request for both parties.
Jackson: We will notify the Korea Exchange Bank in Seoul to accept our draft after 30 days through
our Bankers at Chase Manhattan Bank, New York.
Yoon: That’s right. The Korea Exchange Bank in Seoul is one of our main banks. Thank you very
much. This action is fine with us. We can proceed with our deal then.

1. Have you ever used an irrevocable letter of credit in your business?

Sample answer:
We never had a chance to use such because we make sure that our finances are well balanced.
We are fortunate enough to make preparations that will prevent us from resorting to such a
letter.

2. What are the steps that you take to ensure that your business partner will
pay owed credit?

Sample answer:
We never give credit without any written contract. We also limit lending to special clients only,
those we trust and those we have a long business relationship with.

3. What is your standard number of day’s leeway for seeing an irrevocable let-
ter of credit?

Sample answer:
This depends on the number of orders. We offer a longer leeway for bigger orders. We even
have a detailed standard for this.

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