Export Documentary Credits
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Greater security in international transactions, with guaranteed payment for exports.

Framework

Documentary Credit constitutes an irrevocable commitment on the part of the issuing bank, by means of the instructions of the originator (importer), through which the bank is obliged to accept and/or pay to the beneficiary (exporter) a certain amount (value of the merchandise or service) against the submission of the documents required therein and compliance with all other terms and conditions.

As a method of payment, the Documentary Credit seeks to reconcile opposing interests of the parties to the commercial contract, i.e., to assure the exporter the receipt of the value of the merchandise sold or service rendered and to allow the importer to make sure that the payment made corresponds to the merchandise or service purchased.

Banco BPI may act as the bank notifying the export documentary credit or, at the request of the issuing bank, add its confirmation, assuming in the latter case a full commitment for the proper settlement of the transaction, regardless of the situation of the issuing bank or the country in which it is located, which allows covering the commercial, political and transfer risks the exporter may face with the supplies to foreign countries. 

Advantages

Greater security for the exporter to approach new customers and/or new markets, particularly when the latter are subject to political, economic or monetary instability, since documentary credit mitigates the risk of collection:

  • Transfer of the commercial risk of the importer to the issuing bank.
  • It guarantees the payment of the merchandise or service, provided that it complies with the terms and conditions contained in the Letter of Credit.
  • Coverage of political and transfer risks, if the documentary credit is confirmed by Banco BPI.

It allows the anticipation of export revenues through the discount of the documentary credit.

Beneficiaries

Exporting companies.

Without restrictions, although in minor transactions it should be borne in mind that minimum fees are applicable.

Term
  • Consumer and intermediate goods (short-term): up to 1 year;
  • Equipment goods and services (medium-term): can be extended.


 

Notas

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