Letter of Credit

Please contact us to apply for an L/C.

• Commercial L/C (documentary)
  Standard is the most commonly used type of L/C. 
• Standby L/C
  A standby L/C functions similarly to a Bank Guarantee providing security. For more details of the standby L/C, see the question ‘What is a standby L/C?’
• Transferable L/C
  This type of L/C allows the beneficiary to transfer the L/C in full or in part to a second beneficiary. Any transfer must largely conform to the terms and conditions of the original L/C. Transferring an L/C is subject to various ICC rules. ABN AMRO will assess on a case-by-case basis whether transfer is possible. If you wish to transfer an L/C contact us at +31(0)10-4025444 our (local rates apply). 
• Back-to-back L/C
  With a back-to-back L/C, two L/Cs that are used together to finance a (trade) transaction. This structure is often used when an intermediary or broker is involved between the exporter and importer. It is important to note that the intermediary or broker must have sufficient working capital available to support the L/C arrangement. 
  
  

You could obtain more security by having ABN AMRO confirm the L/C. Confirmation means that we take over the payment obligation from the importer’s bank. If you comply with all the conditions of the L/C, you’ll be protected against the issuing bank's credit risk and the country risk.

One of the conditions herewith is that ABN AMRO must be willing and able to accept this risk. We charge a fee for adding our confirmation.

For more information about the options, please contact us.

You have agreed with your client that payment under the L/C will be made on a future date, for example 90 days after the shipment date. If you would like to receive the money sooner, you can request us to discount under the L/C. This means that we will advance the documents amount to you, less our discount fee and interest.

For more information, please contact us.

A standby L/C is similar to a Bank Guarantee. It is a form of security that is used only when the beneficiary claims that the applicant is in default.

The main difference between a standby L/C and a regular Bank Guarantee is that other documents may be required when submitting a claim under a standby L/C. The applicable ICC regulations may also differ. Standby L/Cs are more commonly used in the United States.

For more information, please contact us.

You can track the status of your documents using the tracking (airway bill) number. A condition for tracking documents is that they must have been picked up and registered by DHL. Follow the instructions below to track the status of your documents..

Go to the DHL website.

Enter the following details: 

• Shipment Reference. DHL uses ABN AMRO’s reference number as the ‘Shipment Reference.’ Example: reference number NLHX1234567E001 or NLHM1234567M003 (i.e. with further additions such as E001 or M003 after our reference number). Please ensure that all capital letters are entered exactly as shown. 
• Date range (from): select the date when the documents were sent to ABN AMRO. 
• Date range (to): this is the current date. 
• You do not have to enter anything in the Account Number or Destination fields. 

Send your trade documents by courier to the following address:

ABN AMRO Bank N.V.
Trade Finance Operations
Coolsingel 131-133
3012 AG Rotterdam
The Netherlands

Send all other correspondence to this address:

ABN AMRO Bank N.V.
Trade Finance Operations
Postbus 949
3000 DD Rotterdam
The Netherlands

Letters of Credit are intended for businesses who want to reduce the payment and delivery risk. It is a suitable form of protection for: 

• international transactions with new business partners 
• high-value transactions 
• shipments to countries that are economically less stable

You will find more information about the main parties involved above under ‘Main parties involved’. The parties mentioned below are often also involved.

• First advising bank: the bank that receives the L/C from the issuing bank and forwards it to a second advising bank. The first advising bank may also act as bank confirming the L/C, meaning that it is also the confirming bank.
• Reimbursement bank: the bank that may be appointed to reimburse by the bank processing the documents for payment under the L/C. This bank will often charge its own fee for this service.
• Transferring bank: the bank that transfers a transferable L/C.

See the document below for more information about bills of exchange. 

Bill of exchange leaflet (PDF, 306 KB)

Endorsing a trade bill means using it as a means of payment. The trade bill can be signed over to another party by placing a signature and company stamp on the back. Bills of Lading and insurance policies can also be signed over in this way.

If you and/or your trading partner want greater security when doing business internationally, a Documentary Collection may be a suitable option. Under a Documentary Collection the banks act as intermediaries for delivery of the trade documents and the processing of payment, but they do not guarantee payment. With a Letter of Credit, however, one of the banks involved does guarantee payment. The issuing (importer’s) bank is obliged to pay a specified amount, provided the exporter meets all terms and conditions set out in the Letter of Credit.

To determine which option suits your situation best, click here for the choice guide (in Dutch) or contact us.