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Product Name
Confirmation of Letter of Credit
Product Description
The Confirmation of Letter of Credit here means, BOC London, in addition to the issuing bank, separately undertakes to pay the beneficiary (the exporter) if all the terms and conditions of the letter of credit are complied with.
Product Functions
The bank instead of the beneficiary, takes the credit risk of the issuing bank, so that the beneficiary can get the payment before the final payment by the issuing bank, provided that all the terms and conditions of the letter of credit are complied with. Normally there are two types of confirmation: open confirmation and silent confirmation.
Product Features
1. Reduction of risks and acceleration of the capital turnover. Confirmation of L/C can help exporters prevent the risks from the issuing bank, the country risk of issuing bank and the foreign exchange control risks.
2. Double guarantee. Apart from the conditional payment undertaking made by the issuing bank, the exporters can get additional conditional payment undertaking from Bank of China, placing the exporters under double payment guarantee.
3. Payment collection guarantee. The exporters upon presentation that comply with the L/C’s requirements and approval of the Bank, can gain the non-recourse payments or payments promises.
Eligible Applicants
1. Exporters who wish to obtain payment confirmation from a bank other than the issuing bank;
2. Exporters who wish to obtain non-recourse funds after presentation of documents even if the issuing bank has a good credit standing.
Application Requirements
I. Basic requirements
1. Legally approved and registered with annually checked business license and other documents effectively proving its legal status and business scope;
2. Having the export and import operation qualifications and real trade background;
3. No blemished credit records in Bank of China and/or other financial institutions.
II. The issuing bank is a financial institution granted with credit and having a good credit standing.
Application Procedures
1. Bank of China 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 and Bank of China makes non-recourse payments or irrevocable payments promises to the exporter after examination and approval;
3. Bank of China 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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