Export letter of credit

Let us assume that your customer instructs its bank abroad to open an export letter of credit in your favour. This contains specific details of the documents to be presented, shipping deadlines and the validity of the letter of credit. We will be notified accordingly by the foreign bank and will forward this notification to you in writing – without payment commitment on our part. Alternatively, we can transmit this notice electronically.

Once all the requirements stipulated in the letter of credit have been met, you will have a claim on payment by the foreign bank which opened the letter of credit. We will check and dispatch the documents on your behalf.

However, if the foreign bank involved is unknown to you or you consider country risk to be too high, we can supplement the payment commitment by the foreign bank. In this case, we would confirm the letter of credit, which means that we commit to making payment.

The advantage to you is that export letters of credit provide protection for your payment receipts on export transactions.