WHAT——What is Import Letter of Credit?

•Letter of credit is an undertaking of a bank for account of the importer to pay the foreign exporter the value of the goods provided the required documents are submitted and the terms of the credit are complied with.

•Innless scope----1. Issuing different types of L/Cs such as: Sight Payment Credits, Deferred Payment Credits, Acceptance Credits, Negotiation Credits, Transferable Credits, Confirmed Credits, Revolving Credits, Reciprocal Credits. 2. Provide such transactions as issue L/C, amend L/C, receive and examine documents, make payment, acceptance or dishonor, assist the importer in investigate the exporter’s credit status, preparation of goods and liner inquiry.

WHY——Why to choose Import Letter of Credit?

•Improve negotiating status - issuing of L/C means that importer provides the exporter with conditional payment commitment of the bank in addition to commercial credit. It improves credit and negotiating status of the importer, so may be able to negotiate for a lower purchase price and better terms;

•Ensure goods - ensure that the goods supplied are the goods ordered.

•Reduce occupied capital - if issuing a L/C outward upon given credit, importer needn’t spend self-owned capital in stages of opening L/C in the opening bank, exporter’s preparation of goods, and delivery;

WHEN——When to use Import Letter of Credit?

•Bank’s guarantee is needed to provide a sense of comfort to the importer and the exporter in the trade transaction  with payments made upon receipt of the right set of documents including the title of goods;

•The imported commodities is in the seller’s market, and the exporter insists on payment on L/C;

•Current capital is not sufficient and the importer intends to make use of convenience of trade finance.

HOW——How to handle Import Letter of Credit operation?

•The Operation flow

•Attentions

1.The followings should be surrendered when issuing a L/C: application form; the contract; import permit (e.g., import registration form of mechanical and electrical products, etc.); various files as per the foreign exchange control regulation (e.g., application form of purchase exchange, the verification certificate of import payment in foreign exchange, record form of import exchange payment, etc.).

2.The followings should also be surrendered when issuing a L/C for the first time: the business license of enterprises; import agency agreement (if needed); other certificates (if needed).

3.When issuing an import L/C, the importer provide the exporter with extra guarantee on payment in cost of more bank charge born by it, so the importer had better ask exporter for preferential prices during the commercial negotiation concerning this point.

ADVANTAGES——Advantages of Bank of China

•Predominant credit ——Bank of China has a long history of over 90 years and has been awarded “the Best Bank in China” by “Euro money” for successively 8 times. With the progressively improved system of corporate governance, overall integration of operation flow, wholly-upgraded service efficiency and rich financial products, BANK OF CHINA has continued to advance toward its goal of becoming a leading universal international bank;

•Powerful Credit Improvement —— The L/C opened by Bank of China is widely acceptable by exporters in various countries, able to improve the credit and negotiation status of the importer to win favorable contract terms;

•Leading technology —— A large number of professional personnel who are proficient in letter of credit business, UCP500, and relevant laws, whose technical and professional level of document checking up and dispute handling is the first class in banking sector;

•Positive accreditation policy —— The earliest commercial bank to implement unified accredit in China, which is gradually perfecting, efficiently simplifying the formalities of giving credit in opening a L/C;

•Abundant service content —— Provide various importers with direct consultation service including credit status of the exporter, the risks in the exporter’s country, the trend of the products in the international market, selecting exporter's bank, quality of terms on the L/C and documents, foreign exchange control, financing policy etc.;

•Efficient risk-evading system —— Sole bank dealing with forward bills sales business to help clients evade exchange risks of time L/C.

•Clear liquidation channel —— Liquidation channels of major currencies include New York Branch - US dollar liquidation center; Bank of China (Hong Kong) - Hong Kong dollar liquidation center; Frankfurt Branch - Euro liquidation center; Tokyo Branch - Japanese yen liquidation center;

•Advanced technology level —— Took the lead to participated SWIFT in 1993, processes sophisticated SWIFT system and is capable of handling convenient and quick incoming export documents business for the clients;

•Global network —— 560 institutions scattered in Hong Kong, Macao and oversea areas, nearly 4000 agency banks, and a multi-nation and multi-layer high-speed universal payment network established through 90 years accumulation;