The accurate understanding of this 60-day period is that the customer starts from the date of bill of lading and pushes it back for 60 days. When the 60-day period expires, it is time for customers to pay.

But in practice, many customers do not calculate according to this rule. They calculated 60 days after the export documents entered the bank, so that the time for the payee to receive the money was many days longer than before.

Therefore, it is best to agree on the payment time with the customer when trading, so as to avoid disputes.

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Symmetry between usance letter of credit and sight letter of credit. When the issuing bank or the paying bank receives the documents sent by the exporter's bank, although the documents meet the examination, they do not pay immediately, but wait until the maturity date of the forward payment draft to fulfill their payment commitments. It is a letter of credit based on the transaction contract of D/P at sight and D/P at forward, which is characterized by "documents are reviewed and agreed with each other, and payment is due". In the practical application of international trade, usance letters of credit can be roughly divided into the following categories: (1) bank acceptance usance letters of credit. With the issuing bank as the drawee of the usance draft, once the documents are examined and accepted, they shall bear the responsibility for payment due to the drawer, endorser and holder; (2) The company accepts the letter of credit. The applicant (importer) is the drawee of a time draft. After receiving the documentary draft, the issuing bank sends it to the importer for acceptance. After acceptance, the documentary draft remains in the issuing bank, and once the acceptance expires, the importer will pay the redemption bill. (3) Deferred payment letter of credit. The issuing bank stipulates that "the bill of lading will be paid after several days" or "the issuing bank will pay after several days after seeing the documents". Generally, the beneficiary (exporter) is not required to open a draft. Even if the draft is submitted, the issuing bank will not accept it, so it is not easy to discount it. Therefore, deferred payment letter of credit is also called non-acceptance letter of credit. In contemporary international trade, sight letter of credit is still the main mode, supplemented by forward letter of credit, and so is China. In international trade, usance letter of credit is very popular with importers, because it is a way for exporters and their banks to finance importers, and the demand for usance letter of credit is also increasing. However, due to the long payment time, country risk, credit risk and market situation under the forward letter of credit, once the bank accepts the draft, its responsibility will be changed from the obligation of unanimous payment of documents under the letter of credit to the obligation of unconditional payment of the draft, which makes the forward letter of credit more risky than the sight letter of credit. It is for this high-risk consideration that the People's Bank of China issued a special document in 1997, putting forward specific requirements for commercial banks to avoid their risks.

Folding forward risk

(a) Hedging the risk of fraud

Some enterprises and companies, unable to obtain bank funds through proper channels, regard opening forward letters of credit without trade background as one of the main ways and means to defraud bank funds, and their means of committing crimes are various. If false contracts or false documents are used to forge the trade background, domestic applicants and foreign beneficiaries will jointly defraud the bank. When domestic applicants use fake contracts to trick banks into issuing forward letters of credit, foreign beneficiaries submit fake documents matching the letters of credit through remittance banks. Because their purpose is to defraud the bank of funds, regardless of the authenticity of the documents, regardless of whether there are discrepancies, the applicants accept the documents and urge the issuing bank to accept them. Once the issuing bank accepts it, the conditional payment commitment of the issuing bank becomes the unconditional payment responsibility due. After receiving the acceptance from the issuing bank, the issuing bank will discount it at the request of the beneficiary so that the beneficiary can borrow money from the bank. Some forged or fabricated the entrepot trade background, some forged the entrepot trade background by buying and selling warehouse receipts, and some forged the entrepot trade background by opening letters of credit. Although these means are different, the ultimate goal is the same, that is, to use the forward letter of credit opened by the bank to discount the returned funds. These funds can't be repaid when they are due, resulting in huge advances from banks. This is why the People's Bank of China prohibits commercial banks from opening forward letters of credit without trade background.

(b) Misappropriation risk

In the long-term letter of credit business, the importer sells the goods and collects the payment. Before the payment date, he is likely to continue to turn over the funds or use them for other purposes. If the importer misappropriates the investment in fixed assets, the fixed investment will generally not generate benefits immediately on the maturity date of the letter of credit, and the due accounts payable will not be paid without cash withdrawal. If it is overdue, the issuing bank will have to make an advance payment. Other importers, in pursuit of high profits, misappropriate payment for goods, speculate in stock futures and force banks to advance funds. The usual way for importers to occupy and misappropriate funds is to exceed the reasonable opening period. In the forward letter of credit business, the payment time of the letter of credit is usually 90 days, and the longest is 180 days. Its reasonable term depends on the capital recovery cycle of imported products. No matter what some companies import, the longer the better. Many importers require 360-day forward payment in order to occupy bank funds as long as possible.