A letter of Credit for you as the exporter

You and the importer decide which documents and conditions you want in your L/C. The importer then instructs their bank to open the L/C and send it to ABN AMRO (advising bank). We check the L/C for compliance with international laws and regulations and check its authenticity. If everything is in order, ABN AMRO will forward the L/C to you. We refer to this forwarding as ‘advising’.

An L/C offers you as an exporter greater security of payment. The importer’s bank (the issuing bank) undertakes to pay you a certain amount once you’ve satisfied the conditions of the L/C. The importer’s payment risk now lies with the bank.

If so, have ABN AMRO confirm the L/C. Confirmation means that we take over the payment obligation from the importer’s bank. If you satisfy all the conditions of the L/C, you’ll be protected against the credit and country risk attached to the importer’s bank. This is on the condition that ABN AMRO is willing to take on this risk. We charge a fee for confirmation.

1. The L/C is drawn up based on the terms the parties have agreed in the trade contract. This states:
• a clear description of the goods and volume/prices
• a ship-by date, L/C expiry date, L/C availability, and document release term
• terms of delivery ( Incoterms )
• terms agreed on part deliveries and transshipment
• agreements about payment of bank fees and the documents to be delivered.
  
  
2. Tip: include a ‘Financial Paragraph’ in the trade contract, in which you, as the exporter, stipulate your requirements for the contents of the L/C.
3. Carefully check the contents of the L/C when you receive it. If you have doubts about the interpretation of certain wording in an L/C, please contact our advisers. If there is anything in an L/C that you do not agree with, contact the importer immediately to ask them to amend the provisions in question through the issuing bank. Only proceed to procure/produce and/or supply if you fully accept the contents of the L/C.
4. Once you’ve sent us all the documents, we check that they are correct and send them to the issuing bank. After the issuing bank has also confirmed that the documents comply with the terms of the L/C, the importer will receive the documents in exchange for immediate or deferred payment. You will be paid the amount due by ABN AMRO under these terms.
5. Any irregularities in the documents may be reason for the importer and/or the issuing bank to withhold payment on the L/C. In order to reduce this risk, you can ask us to conduct a prior check of the documents. Find out more about the cost in our overview of fees .
6. Banks check documents, not goods.

If you’re not sure whether an export L/C is right in your situation, you can use the choice guide (in Dutch) to help you decide. Or call our Trade Finance Operations on +31 (0)10 402 54 44 (local rates apply).