"letter Of Credit"

[Swedishcargo]

Anyone with experience of "letter of credit"? We have an exclusive contract of

import to Thailand of a swedish product. What does the banks say of giving a

bankcredit to letter of credit 60 days?

Hope someone can help with our questions. Maybe someone knows a good bank

that are used to handle with credits to import companies.

Tomas

[p_brownstone]

Anyone with experience of "letter of credit"? We have an exclusive contract of

import to Thailand of a swedish product. What does the banks say of giving a

bankcredit to letter of credit 60 days?

Hope someone can help with our questions. Maybe someone knows a good bank

that are used to handle with credits to import companies.

Tomas

I guess you mean you are an Importer in Thailand intending to purchase from a Swedish Company and they want you to issue a Letter of Credit, payable to them after 60 days Sight of Shipping Documents (i.e. 60 days after they submit to their Bank in Sweden various documents as stipulated by you in the Terms of the Letter of Credit – usually the Commercial Invoice, Insurance documents and Freight Waybill)?

There should be no problem at all, any Bank should be able to do this for you, except obviously very small up-country branches – you will need to have cash in your account here (or a line of approved credit) which will in effect be reduced by the value of the Letter of Credit you want to issue.

Patrick

Edited November 19, 2005 by p_brownstone

[sierra01]

Often they want the L/C issued by a prime world bank, one of the big international banks. I export rice and always insist on L/C's from an international bank, and it's a safe way of handling the financial transaction. I have no experience of L/C's issued by a Thai bank but I wouldn't feel comfortable accepting one.

[p_brownstone]

Often they want the L/C issued by a prime world bank, one of the big international banks.  I export rice and always insist on L/C's from an international bank, and it's a safe way of handling the financial transaction.  I have no experience of L/C's issued by a Thai bank but I wouldn't feel comfortable accepting one.

I believe the OP is Importing into Thailand – you are Exporting so obviously you should never have a situation where your Customers' L/C is issued by a Thai Bank (a side-note; if you Export rice from Thailand you must be quite well connected, most of this trade, at least in commercially interesting volume, is tightly controlled by a very small number of Thai / Chinese Companies here).

In either case you can’t usually insist that the Letter of Credit is “issued” by a “prime world bank” – the usual safeguard is to stipulate the L/C is Irrevocable and Confirmed by a Bank with an international standing or an associate of such a Bank.

Patrick

[~G~]

Some exporters demand that an AAA bank will issue the L/C. Usually the alternative to the L/C is T/T before shipping, I feel that sometimes the exporter wants to "push" the importer to pay upfront (and save them the hassle of processing an L/C, getting all the paperwork right, etc) therefore setting high requirements for the bank.