The main characteristics of letters of credit are as follows: NegotiabilityĪ letter of credit is a transactional deal, under which the terms can be modified/changed at the parties assent.
These principles remain the same for all kinds of letters of credit. If the documents presented are in accord with the terms and conditions of the LC, the bank has no reason to deny the payment.Ī letter of credit is beneficial for both the parties as it assures the seller that he will receive his funds upon fulfillment of terms of the trade agreement and the buyer can portray his creditworthiness and negotiate longer payment terms, by having a bank back the trade transaction.įeatures / Characteristics of letter of creditĪ letter of credit is identified by certain principles. In an LC, the issuing bank promises to pay the mentioned amount as per the agreed timeline and against specified documents.Ī guiding principle of an LC is that the issuing bank will make the payment based solely on the documents presented, and they are not required to physically ensure the shipping of the goods. The importer is the applicant of the LC, while the exporter is the beneficiary. Through its issuance, the exporter is assured that the issuing bank will make a payment to the exporter for the international trade conducted between both the parties. Letters of credit were introduced to address this by adding a third party like a financial institution into the transaction to mitigate credit risks for exporters.Ī letter of credit or LC is a written document issued by the importer’s bank (opening bank) on importer’s behalf. The sheer distances involved in international trade, different laws and regulations, and changing political landscape are just some of the reasons for sellers needing a guarantee of payment when they deliver goods through the maritime route to their sellers. Some of these uncertainties revolve around delayed payments, slow deliveries, and financing-related issues, among others. Earlier this month, Rhode Island joined Washington, Virginia, Vermont, Oregon, New York, and Massachusetts in adopting the California requirements.ĬARB's regulation would allow automakers to sell up to 20% PHEVs by 2035 and by then would need a minimum 50-mile (80.5-km) all-electric range label to qualify.There are several uncertainties that arise when buyers and sellers across the globe engage in maritime trade operations. The 60-page California waiver request seen by Reuters says through 2040, California's zero emission rules will cost $210.35 billion but have total benefits of $301.41 billion.Ī growing number of states are adopting California's electric vehicle rules that are more stringent than what the Biden administration has proposed. That proportion will rise to 68% by 2030 and 100% by 2035. The rules mandate that 35% of the new cars sold be plug-in hybrid electric (PHEV), EVs or hydrogen fuel cell by 2026. vehicles sold in 2022 that were EVs.Ĭalifornia's zero-emission rules will cut by 25% smog-causing pollution from light-duty vehicles by 2037.
Under an EPA proposal released in April to drastically cut vehicle emissions through 2032, automakers are forecast to produce 60% EVs by 2030 and 67% by 2032 to meet requirements, compared with just 5.8% of U.S. "We’ll be on the lookout for that if it were to ever come," Regan said. In a Reuters interview last month, EPA Administrator Michael Regan declined to say how the EPA would react to a California request. The Biden administration has repeatedly refused to endorse setting a date to phase-out the sale of gasoline-only vehicles.ĮPA spokesperson Tim Carroll said "as with all waiver requests from California, we’ll follow an open public process in considering it, as the agency routinely does." "These vehicles will permanently displace emissions from conventional vehicles," wrote CARB Executive Officer Steven Cliff, adding that motor vehicles and other mobile sources are the greatest source of emissions in California. The California Air Resources Board (CARB), which approved the plan in August, asked the Environmental Protection Agency (EPA) on Monday to approve a waiver under the Clean Air Act to implement its new rules that set yearly rising zero emission vehicle rules starting in 2026 and would end the sales of vehicles only powered by gasoline by 2035.
May 23 (Reuters) - California has asked the Biden administration to approve its plan to require all new vehicles sold in the state by 2035 to be either electric or plug-in electric hybrids, a landmark move that could speed the end of gasoline-powered vehicles, according to a letter seen by Reuters.
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