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Name
Confirmation of L/C
Introduction
Confirmation of L/C is the first payment obligation undertaken independently by Bank of China Rotterdam Branch for the beneficiary beyond the issuing bank; it can be divided into open confirmation and silent confirmation.
Functions
It undertakes the credit risks of the issuing bank for the exporter, to help the exporter receive payment in advance upon complying with the document delivery conditions.
Features
1. Reduction of risks and acceleration of the capital turnover. Confirmation of L/C can help exporters prevent the credit risk from the issuing bank, the country risk and the foreign exchange control risks in the country of the issuing bank.
2. Double payment guarantee. Apart from the conditional payment undertaking made by the issuing bank, the exporters can get additional conditional payment undertaking from Bank of China Rotterdam Branch, placing the exporters under double payment guarantee.
3. Payment collection guarantee. The exporters, upon presentation that complies with the L/C’s requirements and approval of the Bank, can gain the non-recourse payments or payments promises.
Charges
The charges are subject to the charging principle and rate applied in the relevant rules of Bank of China Rotterdam Branch.
Target Customers
International trade customers who use L/C for settlement. The consideration is mainly based on the following factors:
1. Exporters who want to obtain the payment guarantee from a bank other than the issuing bank;
2. Exporters who want to obtain the non-recourse funds after presentation of documents even if the issuing bank has a good credibility.
Applicant Qualifications
1. Basic qualifications
1) The applicants shall hold the business license legally approved, registered and annually checked as well as other valid certificates sufficient to prove the legitimacy and scope of operation;
2) The qualification of import and export operation;
3) There is no negative credit record at Bank of China and other financial institutions.
2. The issuing bank must be a financial institution with a credit authorization and a good credibility.
Procedure
1. Bank of China Rotterdam Branch provides confirmation upon the request of the issuing bank or exporter (beneficiary) when advising the L/C;
2. The exporter presents the complying documents to Bank of China Rotterdam Branch, who makes non-recourse and irrevocable payments or payments promises to the exporter after examination and approval;
3. Bank of China Rotterdam Branch mails the documents to the foreign issuing bank to claim reimbursement and will confirm the payment after the foreign payment received.
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