The Incoterms ® rules are published by the International Chamber of Commerce for the interpretation of the most commonly used trade terms in international trade - International Commercial Terms. The main purpose of the Incoterms ® rules is to clearly set out the obligations of the seller and the buyer and the division of costs, [...]
Who do you currently present your letter of credit documents to? Your own bank? Another preferred bank in your own country? Or…… are you being forced to deal with a local office of the issuing bank or their preferred correspondent? Consider completing and sending to your customer a Letter of Credit Request Template prior to the issuance [...]
In the current global financial climate, many internationally trading companies are turning to letters of credit as a means of securing payment from buyers in new or difficult markets. We regularly hear from internationally trading companies who are shocked by the level of letter of credit charges being deducted by UK based advising or confirming banks. Our popular Letter [...]
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 [...]
