Import letter of credit

As an importer, you may be asked by suppliers to apply for opening a letter of credit in their favour. This type of protection may be customary in the country involved, or from the supplier’s point of view it may be impossible to assess your ability or willingness to pay.

By carrying out your instruction to open a letter of credit, we undertake to make payment to your supplier – provided that documents which you have stipulated beforehand are presented to us within a specified period. We will then advise your supplier – the beneficiary – of the availability of the letter of credit via a foreign correspondent bank.

As soon as your supplier's documents, as specified in the letter of credit, are available within the period of validity, we are obliged to make payment – either immediately on presentation or at a later, pre-set date (deferred payment).

The advantage is that no payment will be made unless documents that fully meet the terms and conditions stipulated by you in the letter of credit have been presented.