Why should we accept letters of credit through you in London, when we can use our local banks?
The Trade Operations Centre offers a highly personalised, and 24 hour turnaround service. We also have direct links with the Issuing Bank, so should there be any queries, we are able to contact the issuing bank by phone in the first instance.
What happens if there are discrepancies in the documents we send to you? How can we avoid delays being incurred due to the documents having to be returned to us and additionally when they are represented to yourselves?
This question is often asked, that is why upon arrangement we offer a 'facsimile pre-check Service', where even prior to certification and legalisation, documents can be faxed to us for checking. We will then endeavour to have these checked within 24 hours and advise you immediately. This will then allow you to have compliant documents upon presentation to us. Many mainland European customers use this service.
What is UCP 600?
This is the most recent publication issued by the International Chamber of Commerce. It contains a universally recognised set of rules governing the use of Documentary Credits in international commerce. UCP600 came into effect on 1 July 2007.
Can part shipments be by air and sea?
Yes, if the Documentary Credit allows.
Does the goods description have to be exact?
A goods description on the invoice must match the Documentary Credit. However, on other documents goods may be described in more general terms, not inconsistent with the Documentary Credit.
Do I have to quote a unit price?
Not necessarily, but if quoted in goods description of a Documentary Credit, then your invoices should correspond.
Can I prepare a Certificate of Origin myself?
Only if allowed by the Documentary Credit.
How can I obtain an amendment to a Documentary Credit?
If amendments are required you will need to ask the applicant to instruct the issuing bank to amend the original, however, they are not obliged to do so. Alternatively, if specifically requested we can intervene on your behalf by contacting the issuing bank with which we have direct links with.
What happens if I present discrepant documents to a bank?
Documents presented with discrepancies could lead to payment being refused or delayed.
I have shipped late or have not been able to present documents in time against the Documentary Credit - what options do I have?
In effect, by not complying with the terms and conditions of a Documentary Credit you have lost all the protection previously afforded by it. You may either contact your customer, requesting that the terms and conditions be amended, or you may present documents to the Bank together with instructions to contact the opening bank/issuing bank requesting them to accept the documents notwithstanding the discrepancies. Alternatively, the documents may be presented to the opening bank as a Documentary Collection..
Who do I draw a Bill of Exchange on?
A Bill of Exchange is drawn on the entity that is paying you the money. Normally with a Documentary Credit this will be on the issuing/confirming bank. A bill of Exchange can also be referred to as a draft. Documentary Collections allow you to draw it on your customer.
What does "on board notation" mean?
This is evidence, applied by the carrier, of the date upon which the goods were loaded on the vessel.
What does confirmation mean?
Where a bank, usually the advising bank, undertakes to pay, accept or negotiate with the issuing bank. The confirming bank removes the risk of non-payment by the issuing bank and other risks associated with the country of issue. If a Documentary Credit is unconfirmed, neither the advising bank nor any nominated bank commits to pay.
The Documentary Credit expires on a non working day and the goods will not be loaded until the previous working day, so I cannot get the documents to you in time. What can I do?
If Saturday is not a normal working day for Documentary Credit purposes at the bank authorised to handle documents, UCP 600 allows the latest date for presentation to be extended to the next working day.
When do I get paid under my Documentary Credit once I have presented my documents?
There are four distinct types of Documentary Credit and the timing of payment will depend on the type used.
- Under a Sight Payment Documentary Credit, if documents are in order, these will be taken up and payment made.
- Under a Deferred Payment Documentary Credit, the timing of payment will depend on the terms. The date of payment will be defined in the Documentary Credit. This is usually a specific number of days after the despatch of the goods or the presentation of documents.
- Under an Acceptance Documentary Credit, your usance draft will be accepted by the nominated bank and will become payable at a future date in accordance with the terms of the Documentary Credit.
- If the Documentary Credit is available by negotiation, payment will be made in accordance with its terms.
Can you handle letters of credit from other banks in Saudi Arabia ?
Can you handle business from other parts of the world ?
Yes on a case by case basis, you should contact us for further details
Do you provide finance for shipments to Saudi Arabia ?
Depending on the transaction it may be possible to structure some financing.
When should i talk to you about a new contract and financing ?
As early as possible, if you are still in negotiations it is easier to ask for something to be included in the contract to help structure the financing, rather than after it has all been signed.
Will you look at trade business that is not covered by a letter of credit?
Yes we are happy to consider bank avalised bills of exchange/ promissory notes, or standby letters of credit/guarantees.
We work on open account but have a credit insurance policy, can you help us ?
Yes we would be happy to consider advancing funds against a suitable credit insurance policy.
Do you discount acceptances under letters of credit or avalised bills of exchange ?
Yes depending on the accepting bank.
What is a supplier credit facility ?
It is a simple process we use to provide a bank guarantee for deferred payment shipments to pre approved buyers in Saudi Arabia. We would be happy to send you further details.