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Name
Issuance of L/C
Introduction
L/C refers to a written payment promise issued by Bank of China Rotterdam Branch to exporter at the request of importer, by which the Branch promises to undertake the payment obligation to exporters on the condition that all terms of L/C are complied.
Features
1. Improve customers' bargaining position in a negotiation. Opening L/C provides the exporter with a conditional payment commitment on top of the commercial credit, giving customers a better credit by which they can win the favorable pricing terms for goods;
2. Provide warranty for the goods. With the L/C, the commercial credit is replaced by the bank credit. Bank's involvement can ensure a safer trade. The ownership of the goods, shipping date and quality of goods can be well controlled by the documents and clauses;
3. Reduce the occupation of fund. For the importer who uses the L/C with credit limit, the fund occupation will be minimized during the period from the L/C issuance to the payment.
Charges
The charges are subject to the charging principle and rate stipulated in the relevant rules of Bank of China Rotterdam Branch.
Target Customers
International trade importers who use L/C for settlement. The consideration is mainly based on the following factors:
1. Importers and exporters who want to promote the trade security by making appointment on each other's business activities;
2. The imported commodity is in a seller's market and the exporter require settlement with L/C;
3. Both the importers and exporters want to select trade finance due to the lack of working capital.
Application Qualifications
1. The applicants shall have an corporate account at Bank of China Rotterdam Branch;
2. 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;
3. The qualification of import and export operation.
Procedure
1. The importer submits the application for issuance of L/C, and Bank of China Rotterdam Branch will issue the L/C after examination and approval based on depositing of margin or deduction of credit line in Bank of China;
2. The exporter prepares and ships the goods in accordance with the relevant L/C clauses after having been advised of the L/C;
3. The exporter presents the documents required by the L/C and the presenting bank mails the documents to Bank of China Rotterdam Branch to request payment or acceptance;
4. Upon receipt of the documents, Bank of China Rotterdam Branch will make payment or acceptance to the exporters after examination and approval;
5. Bank of China Rotterdam Branch makes the payment when the acceptance is due.
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