An export sales guide to letters of credit

When delivering in-company Letter of Credit training to export managers and finance teams, I consistently receive feedback along the lines of: "Our sales people would really benefit from a guide to requesting letters of credit as we never seem to receive them in an acceptable format or through a preferred bank." We strongly recommend that [...]

2019-02-12T13:45:52+00:00February 12th, 2019|

Is letter of credit training a cost or an investment?

It's that time when many businesses will be reviewing training requirements and allocating the associated budget for the next financial year. For most companies I talk to, a documentary letter of credit is a "necessary evil", a means of securing payment and / or facilitating trade with buyers in more challenging or developing countries. If [...]

2019-02-04T17:40:26+00:00February 4th, 2019|

A guide to applying for a letter of credit for imports

We have produced the following guide for importers required to issue letters of credit for the purchase of goods from overseas suppliers. Please note that whilst all the common terms and documents are listed below, the order in which they appear on application forms or online facilities may vary between banks. For context and a [...]

2018-07-23T12:18:05+00:00July 23rd, 2018|

Know your customer. Risks for banks and exporters

We have just received an interesting call from a frustrated exporting client. The company sells a range of power products to global markets, including the Middle East, Asia and Africa, where letters of credit are often used to secure payment. Letters of credit have for many years been advised to the company through various banks, [...]

2018-05-24T14:32:09+00:00August 29th, 2017|

Common Letter of Credit Documents

As an exporter, how accurate are the letter of credit documents that you present to the bank? We have stated numerous times in our articles and guides that around 70% of documents presented under letters of credit are refused upon first presentation to banks. The International Chamber of Commerce (ICC) Banking Commission has recently announced [...]

2018-05-24T14:36:54+00:00June 22nd, 2017|

Banks enjoy finding Discrepancies

We constantly receive feedback from exporting companies frustrated by the apparent inflexibility of banks when examining documents presented under letters of credit. The perception is that "banks enjoy finding discrepancies because of the fees they can earn. Easy money!" But is this fair? As a former documentary credits document examiner, I can honestly say that it [...]

2018-05-24T14:45:47+00:00March 1st, 2017|

When will the Advising Bank Pay?

A documentary credit (also known as a letter of credit or L/C) is not only a vital tool enabling exporters to secure payment from overseas buyers, but should also provide a degree of certainty with regard to cash flow. The standard structure of the L/C includes timings for shipment and presentation, following which (assuming the bank determines [...]

2018-05-24T14:51:48+00:00February 28th, 2017|

Is the time right for UCP 700?

(Updated 27th April 2017) It is estimated that around 70% of documents presented under documentary letters of credit are rejected upon first presentation to banks due to discrepancies (or apparent discrepancies). In 2007, the International Chamber of Commerce published the latest revision of its rules - "Uniform Customs and Practice for Documentary Credits, Publication 600", [...]

2018-05-24T14:54:03+00:00January 16th, 2017|

International Trade and How Your Bank Should Help

Having seen a significant growth in international trade during the last couple of decades, there has never been a greater opportunity within the financial sector to support exporting and importing companies of all shapes and sizes. In recent years, the major banks have resourced more international trade specialists in both front line sales and operations, [...]

2018-05-24T14:58:44+00:00December 5th, 2016|

A Cautionary Tale of Incoterms and Payment

How much thought do you give to the underlying contract delivery terms when requesting letters of credit from overseas buyers? The Incoterms® 2010 rules, published by the International Chamber of Commerce (ICC pub. 715), define the responsibilities of seller and buyer in respect of cost, risk and other obligations whilst goods are in transit. Whilst [...]

2018-05-24T15:03:22+00:00November 2nd, 2016|