Letters of Credit
Most international letters of credit are governed by rules developed in conjunction with the International Chamber of Commerce (ICC). These rules are known as the Uniform Customs and Practices for Documentary Credits (UCP). UCP PUBLICATION 500 are the rules governing international letters of credit.
What are letters of credit?
A Letter of Credit is a payment instrument generally used for international sales transactions. It is basically a mechanism, which allows importers/buyers to offer secure terms of payment to exporters/sellers in which a bank (or more than one bank) gets involved.
Letters of credit are used to protect the buyer and seller during a sales transaction.
UK Company (Company A) is shipping goods to a company in Brazil (Company B). Company B will at some point need to pay Company A for the transaction. A letter of credit may prevent the goods being released to Company B upon arrival at the port until a payment has been made to Company A.
This is a very basic example. Contact us for the information on how a letter of credit would work for your specific shipping transaction.
Seairo Shipping: Letters of Credit.
Problems can arise between banks and thier customers when lodging documents, this is due sometimes to interpretation of UCP 500 . Due to the experience gained over the years, Seairo Shiping Ltd can mediate between banks and their customers in the event of any interpretation problems.
Seairo Shipping are able to provide guidance on letters of credit and the UCP 500 document and how it relates to your specific transaction.
Seairo Shipping Ltd can offer a full banking lodgement service of all documents, not just shipping documents, for any export transaction governed by letter of credits. We can preprare and lodge invoices, packing lists, certificate of origins and another documents governed by the letter of credit. Documents must be correct at the time of lodging with banks otherwise discerepancy fees raised by banks can be expensive. Seairo Shipping Ltd will offer a discrepancy free service, in the event of using our full lodgement service. Any descrepancies will borne by Seairo Shipping Ltd, but then what are descrepancies !!!. we are all aware of the “doctrine of strict compliance”