Export Letters of Credit
The Export Letter of Credit is issued by the buyer's bank. That bank commits to pay you (the seller) when you have complied with the documentary terms identified in the letter of credit.
When you are the beneficiary of an Export Letter of Credit, California Bank & Trust will assist you in complying with the letter of credit terms so you will be paid in full within the agreed time limit. Our seasoned international banking specialists will guide you through the process, helping you achieve the prompt payment so crucial to your cash flow. more
Assignment of Proceeds
Whether a letter of credit is transferable or not, the beneficiary of a letter of credit may assign their rights to receive the proceeds of the letter of credit. The party to whom the proceeds are assigned is called the Assignee. Unlike a Transferee, the Assignee is not a beneficiary of the letter of credit, and may not perform the obligation of the beneficiary nor draw under the credit.
At times, the beneficiary of a letter of credit is not the seller-supplier of the merchandise, but instead is acting as a middleman or broker. If the seller (beneficiary) does not have sufficient funds to purchase goods directly from the supplier/manufacturer, the seller may instruct the advising bank to pay a portion of the amount payable under the letter of credit to a third party supplier (the 'Assignee'). Any letter of credit may have its proceeds assigned to a third party, and the letter of credit does not have to state that it is assignable. This is known as an 'authority to pay' or an 'assignment of proceeds'.
Transferable Letters of Credit
On a Transferable Letter of Credit, the rights and obligations of the first Beneficiary may be transferred to second Beneficiary. The second Beneficiary acquires the same rights under the letter of credit as the first Beneficiary, for the amount transferred. To be transferable, the letter of credit must state that it is transferable. Transfers may be either full or partial.
An intermediary often requests that a letter of credit be transferred to a Second Beneficiary. This intermediary has contracted with the buyer to provide a specific shipment. A Second Beneficiary may make a portion of, or perhaps the entire shipment. The Second Beneficiary (transferee) is normally a supplier who is willing to provide goods once the letter of credit is transferred to them. The transferred letter of credit, like an original letter of credit, carries the engagement of the Opening/Confirming Bank to pay upon presentation of conforming documents.
Export Bill Discounting
Export Bill Discounting is a method of trade finance for exporters whereby California Bank & Trust may purchase, without recourse, accepted drafts under a usance letter of credit.
In an Export Bill Discount transaction, the exporter agrees to turn over the rights to claim for payment of goods or services delivered to an importer under a Letter of Credit, in return for a discounted cash payment from California Bank & Trust. In exchange for the payment, California Bank & Trust is transferred the Issuing Bank's debt obligation and assumes the full risk of the payment by the Issuing Bank. The exporter is thereby freed from any financial risk in the transaction and is liable only for the quality and reliability of the goods and/or services provided.
Downloads
Export Letter of Credit Instructions
This form is to be used by an Exporter to instruct his buyer to use CB&T as the advising bank and also the terms and conditions desired in the export Letter of Credit.
Transferable Agreement
This form is to be used by a Beneficiary of an export Letter of Credit wishing to irrevocably transfer all or a portion of a Credit to a Second Beneficiary.
Assignment of Proceeds
This form is to be used by a Beneficiary of an export Letter of Credit to irrevocably assign proceeds of the Credit to a third party.
Drafts Purchase Agreement
This form is to be used by a Beneficiary of an export Letter of Credit to sell to CB&T the draft prior to its maturity.
Bank Draft
This form is to be used by an Export to prepare a Bill of Exchange.
Document for Negotiation Under Letter of Credit
This form is to be used by a Beneficiary of an export Letter of Credit to submit documents for examination and negotiation to CB&T.
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