Export

Export Documentary Credit (Export DC)

An Export Documentary Credit is a commitment given to You as the exporter by the buyer’s bank (the Issuing Bank) that they will make payment to You upon presentation of a pre-agreed, specified set of documents to a nominated bank. Time scales, dispatch dates and other terms will be built into the terms and conditions of the Documentary Credit.

If You want to remove the risk of non-payment by the Issuing Bank, and other risks associated with the importing country, You can request adding confirmation to the document by a prime bank.

Advantages

• You know exactly when You will be paid for the goods. You can use the credit to raise finance before or after shipment
• You can be secure to receive payment for the goods even if You are not the actual seller of the goods but only a middleman
• by means of transfer of Export Documentary Credits
• Documentary credits are the preferred choice for international transactions in some parts of the world, for example the Far East or Middle East
• By use of Export DCs You can furnish Your counterparts with deferred payment period, which will support to Your sales volume expansion, achievement of new markets, etc. You can get finance/payment in advance upon receipt of the DC or presentation of a pre-agreed, specified set of documents

Export Bills for Collection

The seller ships the goods and requests their bank to send the title documents (plus any others required), together with collection instructions, to the buyer’s bank. The importer’s bank then requests payment and will not release the documents until the importer has either made payment or promised to do so at a later date agreed by the exporter.

Advantages

• This is a more secure method of receiving payment than open account trading. However, goods sent by air or land have no title document, potentially allowing the importer to obtain possession if they can provide evidence of ownership
• If goods are released with the importer promising to pay at a later date, control of them has been lost, and any security has also been lost. This promise normally involves the buyer accepting a Bill of Exchange
• Typically used instead of Documentary Credits where an exporter has established an element of trust and relationship with his importer, but still wishes to retain some control. The level of complexity and documentation is also reduced, which usually results in lower charges