Interesting to hear from a number of our UK based clients recently that their Relationship Manager at the Bank seems a lot more interested and inquisitive about the profile of their international trading business. Who do I buy from/sell to ?, which country are they based in ?, how long have I been trading with [...]
Before deciding to effect payment by letter of credit, an importer should consider the following: Will my bank be prepared to issue a letter of credit and what will be the impact on my banking facilities? Will I have to pay upon presentation of documents (ie: at sight) or can I negotiate an extended credit [...]
As many exporting businesses will be only too aware, it is very common for overseas buyers to insist that a bond or guarantee is provided usually by a bank, as a standard means of securing the terms of the contract and then usually covering the exporter's performance of their obligations during the period of the contract. In some instances [...]
The Incoterms ® 2010 rules published by the International Chamber of Commerce makes a clear distinction between rules appropriate for any modes of transport and those deemed more suitable for sea and inland waterway transport only. These are classified as follows: Rules for Any Mode or Modes of Transport: EXW, FCA, CPT, CIP, DAT, DAP, [...]
A confirmed credit is one to which a second bank, usually in the exporter’s country, adds its own undertaking to that of the issuing bank, that payment will be made. This is appropriate if an exporter does not find the security of an unconfirmed credit sufficient (due to issuing bank risk or political / economic [...]
At a recent exporter’s breakfast hosted by a well known UK bank which promoted the use of letters of credit, a disgruntled manufacturer raised his hand during the question and answer session and made some very sweeping statements including: “Letters of credit just don’t work, they are a waste of time, you just don’t get [...]
The failure rate of first presentations of documents by exporters under letters of credit continues to be high, with banks quoting these rates at between 60% and 80%. The reasons for these high levels are varied but will include the failure of the beneficiary to initially check the terms of the letter of credit to [...]
Over the years it seems that banks in the UK have to some extent lost their appetite to act on their nomination and truly "negotiate" documents presented under unconfirmed letters of credit. It used to be quite commonplace for a beneficiary of such an L/C to ask their bank to negotiate , and this request [...]
The ISBP (full title: International Standard Banking Practice for the Examination of Documents under Documentary Credits) is an International Chamber of Commerce (ICC) publication which provides important guidance regarding the examination of documents presented against letters of credit. It is important to note that the ISBP cannot in any way change the UCP 600 rules [...]
It is a widely held view that banks are reluctant to assist businesses who require financial support in order to trade internationally. But how fair and accurate is this? The continued growth in International Trade over recent years has led to an increase in demand from UK importers and exporters for banks and financiers to [...]
