DOCUMENTARY LETTERS OF CREDIT
Why use documentary credits?
When goods are bought or sold abroad the transaction is complicated by a number of factors:
The buyer and seller are most likely widely separated by legal or natural borders.
The buyer and seller may be unacquainted with each other’s business standing and integrity.
Import / export and exchange control regulations dictate the use of a letter of credit.
Whereas in a shop or market the buyer actually handles, examines and physically takes away a purchase from a distance cannot always ensure that the articles agreed upon for sale are those eventually obtained. Obviously, what is required for such transactions is a form of proceeding which protect the interests of the parties involved. To satisfy both, wide use is made of the documentary credit advised through the banking system, calling for the exporter to present to a bank documents evidencing shipment or dispatch of the required merchandise for which, if the documents are in order he will be paid. These documents often convey title to the goods themselves, so that the buyer not only knows what he is getting but can ensure that he, rather than an un-entitled party, is able to obtain release of the goods when they arrive at destination.
Essentially, a credit is a written undertaking given by the buyer’s bank, (the issuing bank), to pay an exporter of goods, the beneficiary.
The beneficiary, usually through an advising or confirming bank in the beneficiary’s country, is guaranteed to receive payment provided the terms and conditions of the credit are complied with and documents called for by the credit are presented within the time limit specified.
Through years of experience, we recognize many companies are reluctant to trade under the protection of a credit due to the complexity of the transaction.
Initially a buyer establishes a documentary letter of credit, after he has negotiated with his seller the purchase of goods and / or services. At Britam we have the experience and expertise to handle the negotiation of a documentary credit. Even at the outset of a contract, advice and assistance is offered to ensure a completed document is free from error, and provides a workable instrument acceptable to both parties.
Once the order is available we will effect shipment, having firstly submitted a fully comprehensive quotation.
All documentation called for by the letter of credit will be completed by us, to include commercial invoices, packing lists, certificates of origin, sight drafts etc. In order to ensure that deadlines specified in the letter of credit are met, we present the letter of credit complete to the negotiating bank.
**Subject to consignment shipping with Britam International Ltd and recommendations for amendments to documentary letters of credit being complied with we will indemnify the beneficiary against bank fees for discrepancies upon presentation. Also subject to The Letter of Credit being fully Negotiated and Presented by, and all relevant documents being produced by Britam.International Ltd.
Britam International Ltd, Springwood Industrial Estate, Braintree, Essex CM7 2RN
Freephone 0800 170 1171
Espana - Telefono +34 950 982 027 - Fax +44 8704215408
BRITAM INTERNATIONAL LTD
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Import and Export International Shipping Services Company