EURO EXIM BANK
Letter of Credit Services
A letter of credit is a written undertaking from a bank to pay a seller once the seller presents documents that meet the terms set out in it. Letters of credit are used in international transactions to ensure payment will be received where the buyer and seller may not know each other and are operating in different countries. Euro Exim Bank issues letters of credit under its Class "A" international banking licence from the Financial Services Regulatory Authority of St. Lucia.
Euro Exim Bank deals with two types. An at sight letter of credit is payable immediately, within three to five days, after the seller meets the requirements of the letter of credit. A usance letter of credit, also known as deferred payment, time or term, is payable at a predetermined future date after conforming documents are presented.
The buyer applies to Euro Exim Bank, submitting an application, the underlying agreement and other necessary documentation. Euro Exim Bank reviews the application, and if everything is in order produces a draft instrument and a quote stating its charges. Once issuance fees are paid the letter of credit is issued and sent to the advising bank in the beneficiary's country. The beneficiary checks the terms, ships, and presents the required documents, meaning the bill of lading, certificate of origin, commercial invoice and insurance, to the advising bank, which checks them against the terms and forwards them. Euro Exim Bank examines the documents for compliance and confirms payment terms to the beneficiary, then sends the documents to the buyer to claim the goods from the carrier. The buyer settles with Euro Exim Bank according to the terms of the letter of credit.
Onboarding comes first. A member of the team makes contact within two working days of an enquiry and provides an E-KYC consent letter and an invitation to begin the KYC process. The E-KYC fee is non-refundable and is not adjusted against issuance fees, and third-party payments are not accepted. Once the fee is paid, the required documents are uploaded through the client KYC portal, where a third-party provider reviews the submission and advises on anything outstanding.
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Frequently asked questions
What is the difference between an at sight and a usance letter of credit?
Timing of payment, and nothing else about how the instrument works. An at sight letter of credit is payable once the seller has met the requirements of the letter of credit and the documents have been found to comply. A usance letter of credit is payable at a predetermined future date after conforming documents are presented. Sellers generally prefer at sight and buyers generally prefer usance, so which one appears in the contract is usually the outcome of that negotiation rather than a banking decision.
How do I start, and what happens first?
Complete the form on this page or contact us, and a member of the team will be in touch within two working days. You will then be sent an E-KYC consent letter and an invitation to begin the KYC process. Once the E-KYC fee is paid you receive a link to the client KYC portal, where the required documents are uploaded and a third-party provider reviews them and comes back to you on anything missing.
Is the E-KYC fee refundable or set against the issuance fee?
No to both. The E-KYC fee is non-refundable and is not adjusted against issuance fees, and it is stated plainly here so it is not a surprise later. Third-party payments are not accepted, which means the fee must come from the applicant and not from an intermediary or another company.
How long does it take?
Standing up a new trade finance relationship is usually the slow part, and across the market that is measured in weeks rather than days. Euro Exim Bank is built to be quick to stand up as a second relationship, and once documentation is complete the drafting and issuance steps are deliberately short. Timelines after issuance depend on shipping, on the presenting bank and on whether the documents conform, none of which sit with the issuing bank.