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Export Documentary Letters of Credit

A payment instrument intended for entrepreneurs and companies for secure trading and minimisation of business risks when exporting goods and services.



Benefits

When using the documentary letters of credit as a supplier-exporter you have a certainty that you will be paid for the delivery once you have met all of the conditions prescribed in the letter.


Other merits include:


  • Irrevocable obligation of the bank,

  • Protection from risk of the inability to pay on the part of the exporter,
  • The use of the letter of credit as security against subcontractors,
  • A suitable means of short-term financing,
  • Possibility of further sale of the receivable prior to maturity,
  • Hedging against territorial and transfer risk with the letters of credit we confirm.

 

Get Acquainted

A documentary letter of credit is a written obligation of the bank issued on the basis of an instruction from the buyer to provide the authorised person with financial performance in the arranged amount once they have met all of the conditions of the letter of credit.


Types of documentary letters of credit:


  • Notified letter of credit - the beneficiary is merely notified by the advising bank, without the advising bank entering into any obligation
  • Confirmed letter of credit - based on a request or authorisation, the advising bank confirms the letter of the issuing bank, whereby the former assumes an obligation similar to that of the issuing bank
  • Revolving letter of credit - after the amount has been used up or during a set period is automatically renewed in its original amount
  • Transferable letter of credit - can be transferred to another entity (company), which thereby assumes the right to use the letter and receive payment
  • Back-to-back letter of credit - issued on the basis of another letter which serves as security for the bank
  • Standby letter of credit - essentially a guarantee in the form of a letter of credit

 

Terms of Use

A documentary letter of credit can be used even if you do not have a current account in our bank. We are prepared to provide you with advisory services before the conclusion of the contract.We recommend a bank suitable for issuing the letter of credit and advise you on how to stipulate the conditions of the letter of credit and what kind of letter to choose.

Documentary letters of credit are governed by the Unified Customs and Regulations for Documentary Letters of Credit, 1993 Revision, which was issued by the International Chamber Of Commerce in Paris as publication no. 500.
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