Import + Export
Import and export payment solutions, structured correctly, could protect you from Foreign Exchange Rate fluctuation as well as Sovereign,Performance, Financial, Commercial, Delivery risks, etc.
Open Account, Cross Border Payments / Receipts
Remittance of funds in this instance is effected before goods are dispatched / received or services rendered.
These type of transactions are normally facilitated when an exceptionally high level of trust exist between the Importer and Exporter, or vice versa.
Documentary Credit (Letters of Credit):
- Designed to protect the interest of both the Applicant and Beneficiary.
- It is issued at the request of the Applicant, after a Contract of Sale has been agreed to with the Beneficiary (Exporter).
- Conditional guarantee of payment on the proviso that all conforming documents, as prescribed in the Documentary Credit, are timeously received.
- The Beneficiary is guaranteed to receive payment, provided that all the terms and conditions of the Letters of Credit have been met and all required documents have been timeously received.
- Provides the Applicant (Importer) with comfort of receiving the ordered product, on the proviso that the Letter of Credit has been correctly structured.
- An instruction from a Drawer (Exporter) requesting a local Bank (Collecting Bank) to collect payment from a Drawee (Importer) against delivery of relevant commercial documents.
- Documentation is only released to the Drawee upon Payment or Acceptance of the documents.
- The Bank acts as a collecting Agent for the Drawer.
A Guarantee is a contractual undertaking issued by a Bank in favour of the Beneficiary for goods or services, whereby the Bank undertakes to make certain milestone payments on behalf of its client (the Applicant), in the event of the Applicant defaulting in terms of payment or performance in terms of the underlying commercial contract. The Bank's commitment is legally independent of the underlying commercial contract.
A Guarantee usually involves a minimum of three parties:
- The Beneficiary - the entity/individual in whose favour the obligation has been issued, who requires security against the risk of the Principal's non-performance or default under the primary contractual obligation.
- The Applicant - the entity/individual applying for the issuance of a Guarantee covering a particular payment/performance.
- The Guarantor - the Bank (or party) who has issued a Guarantee on behalf of the Applicant. The Guarantor is usually the Applicant's Bank situated in the same country as the Applicant.
Guarantees may be issued as follows:
- A Direct Guarantee is a Guarantee issued by the Guarantor/Bank and handed to the Beneficiary.
- An Indirect Guarantee is a Guarantee issued by a local Bank, on the behalf of the Guarantor, in the Beneficiary's Country.