The "method of payment" is one of the most important factors that needs to be agreed by the buyer and seller during the formation of a Contract of Sale.
One of the safest methods of payments, used by all parties, is a Documentary Credit. This method has been used throughout the world for over 100 years.
How ANZ can help
ANZ can help exporters with the following concerns in relation to Documentary Credits.
- Advising Export Documentary Credits
- Bank and Country Risk (Confirmation)
- Transferable Documentary Credits
- Back-to-back Documentary Credits.
ANZ can help importers with the following concerns in relation to Documentary Credits.
- Applying for a Documentary Credit
- Standby Documentary Credits
- Revolving Documentary Credits
- Back-to-Back Documentary Credits.
How Documentary Credits work
The buyer's bank reimburses the seller, through their bank, against presentation of documents drawn in strict compliance with conditions stipulated in the Documentary Credit by the buyer.
Documentary Credit and confirmation cycle
To ensure a consistent approach to interpretations involving transactions completed under Documentary Credits, the International Chamber of Commerce has provided international accepted standards governing their use.
All parties involved in Documentary Credit operations should be familiar with the provisions of the Uniform Customs and Practice for Documentary Credits (UCP). Remember that Documentary Credits deal in documents only, not goods.