-Export settlement tool with lower risks

WHAT——What is export letter of credit?

•A series of service provided to the exporter by the bank in exporter’s country after it received L/C from issuing bank, including advising L/C, taking up and examining documents, presentation, reimbursement etc.

•The contents of export L/C include checking up the authenticity of export L/C and amendment of L/C, advising the domestic exporter; transfer L/C, examining transport documents surrendered by the exporter and presentation of documents ; deal with trade financing such as negotiating, bill purchase, discounting on the request of clients; forward-sold of exchange in RMB; inquiry, urging, recourse short payment and interest, by-sending documents; check the credit of importer.

WHY——Why to choose export letter of credit?

•Lower risks - bank credit of the issuing bank replaces commercial credit of the importer, the issuing bank provides undertaking of conditional payment to exporter;

•High initiative - exporter will obtain the undertaking of unconditional payment from the issuing bank as long as the exporter can guarantee the quality of documents which is completely under control of the exporter;

•Fee transfer - banking charges such as opening L/C etc. are usually for the importer’s account.

WHEN——When to choose export letter of credit?

•The exporter has no awareness of or confidence in the credit status of the importer and needs additional undertaking from the importer’s bank;

•Needs to apply to the local bank for packing loans, so as to finance preparing for the goods to be exported.

HOW——How to handle export letter of credit operation?

•The Operation flow

•Attentions:

1.When discussing business terms with importer, “soft clauses” L/C should be avoided. At the same time a safe and convenient way of reimbursement should be confirmed to guarantee a safe collection of payment;

2.Before the negotiating bank examines documents, the exporter needs to present: a. full set of documents stipulated in L/C; b. Origin of L/C;

3.If insisting on sending documents with discrepancies, it is difficult to handle trade financing;

4.The bank will deal with operations such as collection of payment, settlement of payment, credit account according to the state regulations concerning foreign exchange control;

5.If exporter wants to withdraw L/C, he needs to present: a. trust instrument in written form; b. full set of original L/C.

ADVANTAGES——the advantages of Bank of China

•Predominant reputation ——Bank of China has a long history of over 90 years and has been awarded “the Best Bank in China” by “Euromoney” 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;

•Client first —— To provide clients with the most efficient service in shortest period is our continuous aim;

•First-class professional service ——Bank of China, as the first bank in china to provide international settlement business, has absorbed a pool of talented experts. The bank has maintained the largest share of the domestic market and has always been the best against its Chinese peers in this regard;

•Overall services —— Provide direct investigation or consulting service including credit status of the importer and issuing bank, the risks of the import country, the going trend of the products in the international market, terms of L/C, quality of  documents, foreign exchange control, financing policy etc;

•Effectively risk-evading system —— The first bank in china to offer Renminbi forward purchases and sales for foreign exchange, Bank of China accumulated rich experiences in helping the clients to dissolve overall exchange risks;

•Safe and timely clearing business —— With four major clearing center, that is US dollar clearing center- New York Branch; Hong Kong dollar clearing center- Bank of China (Hong Kong); Euro clearing center -Frankfurt Branch and Japanese yen clearing center-Tokyo Branch, BANK OF CHINA stands as the leader in domestic market for foreign currency clearing businesses;

•Advanced technology level ——Bank of China became one of the first bank to  participate SWIFT in 1993. Sophisticated SWIFT system provides our clients with robust guaranty of convenient and high-speed collection service;

•Global network —— With 12529 domestic branches, 560institutions scattered in Hong Kong, Macao and oversea areas and nearly 4000 agency banks, Bank of China, exclusively in domestic market, has established a multi-nation and multi-layer high-speed global payment network established through 90 years accumulation.