Import Letter of Credit
Managing the timely delivery of conforming goods
Let us help you complete the bank’s letter of credit application form.
We can structure the best letter of credit terms for you. This helps to improve the probability of receiving quality goods on a timely basis which conform to your purchase order.
Key risk considerations
When you require your own bank to exercise maximum control over examination of the documents and payment, the availability of the letter of credit should be restricted to the counter of the issuing bank, or alternatively made available with a nominated bank in the beneficiary’s country by negotiation.
Because banks are required only to examine documents ‘on their face’ without validation of their genuineness or whether they accurately describe the goods, careful consideration should be given to the required documents.
When a pre-shipment inspection certificate is required, it is important that the LC application form specifies the name of the (independent) issuer and the certification/outcome that must appear in the inspection document.
When goods are shipped by sea, it is important that the original bills of lading are released to you by the bank in time for vessel arrival. The period allowed for documentary presentation should be restricted to facilitate this, taking into consideration the port to port transit time, place of LC expiry, and processing of documents by each bank.
Usance payable at sight (UPAS) credits can enable you to obtain (longer) credit terms whilst facilitating payment at sight to your supplier on their presentation of complying documents to the bank.
To receive a free copy of our importer’s LC checklist, please email stephen@axstradefinance.co.uk