Letter of Credit Export

1. You and the importer agree on the documents, terms and conditions to be included in the L/C.
2. The importer then instructs their bank to open the L/C and send it to ABN AMRO (acting as the advising bank).
3. We check the L/C for a.o authenticity and compliance with international laws and regulations. If everything is in order, ABN AMRO will forward the L/C to you. This process is referred to as ‘advising’.

An L/C offers you, as an exporter, higher level of security of payment. The importer’s bank (the issuing bank) undertakes to pay you a specified amount once you have met all the terms and conditions of the L/C. With a Letter of Credit in place, the bank’s creditworthiness effectively replaces that of the buyer.

You can increase your level of security by having ABN AMRO confirm the L/C. Confirmation means that we take over the payment obligation from the importer’s (issuing) bank.

If you comply with all terms and conditions of the L/C, you’ll be protected against the credit risk and country risk of the importer’s (issuing) bank. This is subject to ABN AMRO being able and willing to accept this risk. We charge a fee (PDF, 241 KB) for confirmation.

1. The L/C is issued based on the terms agreed in the underlying trade contract. Which includes a.o.:
• A clear goods description including quantity and prices.
• Latest date of shipment, expiry date, availability of the L/C, period of presentation of documents.
• Delivery terms (Incoterms).
• Partial/transshipment allowed/not allowed.
• Payment of bank charges and documents required.
  
  
2. Tip: include a ‘Financial Paragraph’ in the trade contract, in which you, as the exporter, specify your requirements for the contents of the L/C.
3. Carefully review the L/C when you receive it. If you have any doubts about the interpretation of certain wording, please contact Trade Finance Operations. If there is a provision you do not agree with, contact the importer immediately and request for an amendment via the issuing bank. It is recommended only to proceed to procurement/production and/or deilivery once you fully accept the contents of the L/C.
4. Once you’ve submitted all required documents, we check if they comply with the terms and conditions of the L/C and forward them to the issuing bank. When the issuing bank also finds the documents complying, the importer will receive the documents in exchange for immediate or deferred payment. You will receive payment from ABN AMRO in accordance with the L/C terms.
5. Any discrepancies in the documents may give the importer and/or the issuing bank grounds to refuse the documents and withhold payment under the L/C. To reduce this risk, you can request us to conduct a prior documents check. More infomration about the cost in our overview of fees (PDF, 241 KB) .
6. Please note: banks deal with documents, not with goods.