problem1. Flora Co Ltd operates a large chain of supermarkets in South Africa. The products are imported in bulk from Germany and distributed throughout the country. Part of the good are re-exported to some supermarkets found in Mauritius. Flora Co Ltd imports all the goods under usance Letter of Credit 90 days from BL date. Part of the goods is re-exported to Mauritius under Collection basis and the importer has 60 days to pay the bills. The German exporter has decided to change the trading terms to Sight LC as from January 2013. They have come to your Bank for advice and have set the following problems that need to be answered.
(a) Differentiate between letters of credit and documentary collection basis as a mode of doing business with the help of flowcharts.
(b) describe the importance of Inco terms in international trade.
(c) The customer has heard about the use of factoring and export discounting facilities to ease cash flow when providing credit facilities. describe both concepts.
(d) Discuss on the provisions of Article 6 of UCP 600 (Availability, Expiry Date and Place for Presentation).