Export, Import and Domestic Letters of Credit (Sight and Term)
Letters of credit are one of the payment methods for sale of goods between exporters and importers.
Types of letters of credit can include:
- sight or term
A letter of credit is an undertaking given by a bank that they will pay the exporter. The exporter must fulfil all of terms and conditions of the letter of credit to ensure the issuing bank will pay.
All of our letters of credit are irrevocable and subject to Uniform Customs and Practice for Documentary Credits (UCP 600, 2007 revision).
As an exporter or seller you might ask for a letter of credit if you're unsure of the importer's ability to pay.
The issuing bank offers their credit standing instead of the importer's. This provides security to the exporter and minimises their credit risk. Payment is made under the terms detailed in the letter of credit.
We can "confirm" a letter of credit issued by another bank. This adds our undertaking of payment in addition to the issuing bank's and gives exporters the highest level of payment comfort.
Important: A letter of credit does not replace the need for a clear and concise contract of sale.
For more information read our Export Letter of Credit Confirmations Fact Sheet (PDF, 341KB)
As an importer or buyer you might need to improve the payment risk your seller faces. We have one of the strongest credit ratings of all banks in the world. Our letters of credit give a high level of payment assurance to your exporting customers.
For more information read our Import Letter of Credit Fact Sheet (PDF, 332KB).