Export solutions briefly explained
- Open account transactions
- Documentary collections
- Irrevocable documentary letters of credit (LCs)
- Cash in advance
- Transferable documentary letters of credit
- Standby Letters of Credit, Bid and Performance Bonds
- Forward Exchange Contracts
- Foreign Currency Accounts and Term Deposits
- ANZ Transactive Trade
Open account transactions, whether within NZ or across borders, are the most common payment method.
The exporter ships the goods with an invoice and awaits the payment from the importer. The importer has the advantage as there is no guarantee of payment on time or even payment at all.
Documentary collections can be either term or sight.
The importer's and exporter's banks act as collecting agents in the transaction as they monitor the payment and delivery of relevant documents for the goods release.
Term means that the exporter has extended credit to the importer who may accept the documents and pay at a later date (documents against acceptance). Payment of the term acceptance is reliant on the importer's ability to pay on the due date with loss of control of the goods by the exporter.
Sight means the importer is requested to pay immediately on presentation of the collection documents (documents against payment).
While a collection offers a little more protection for the exporter, the importer's ability to choose when they pay is more limited.
Irrevocable documentary letters of credit (LCs) offer a good deal of protection when doing business overseas, as the payment from the importer is guaranteed by the importer's bank (subject to documents presented by the exporter complying exactly with the LC terms).
The exporter may then also request LC confirmation (usually subject to agreement and at an additional cost) which means that LC issuing bank and country risks are then guaranteed by another bank (usually the exporter’s bank).
This product relies on the importer having an approved LC facility to enable the irrevocable LC to be issued. This can give the importer the ability to negotiate a better overall deal price.
Cash in advance means that the exporter receives the payment for goods before they have been shipped. The importer trusts that the exporter will honour the contract and deliver the goods on time and as specified.
A letter of credit (LC) designated as transferable by the issuing bank provides the beneficiary with the right to make it available in whole or part to a second beneficiary.
Transfer is only under the terms and conditions of the original documentary credit with the exception of amount, unit price, shipment expiry date and insurance cover.
Drafts and invoices may also be substituted by the first beneficiary.
An exporter may request a Standby Letter of Credit (SBLC) as backup. It can only be activated in case of non performance or default of the underlying transaction.
The SBLC demonstrates to the beneficiary that the buyer is reliable, operates a sound business and has the capability to complete the transaction. It secures payment for the beneficiary.
Bid and performance bonds also demonstrate to the beneficiary the applicant’s skills and ability to carry out the work being tendered for.
Clean inward payments via telegraphic transfers are an electronic payment instruction sent to ANZ by an overseas bank (via SWIFT) to pay the exporter or beneficiary a specified amount of money.
Their advantage to the exporter is speed of payment (usually within 24 hours). Payments can be in all major currencies.
As an exporter, you may be receiving payments from your customers in a foreign currency. There is a risk that the local currency value of the agreed payment amount increases or decreases during the term of the agreement, exposing your business to foreign exchange risk.
ANZ can assist in managing this exposure by using a Forward Exchange Contract.
These give you the ability to conduct accounts and term deposits in all major currencies.
ANZ Transactive Trade is ANZ’s electronic channel to enable you to receive your Letters of Credit for download into a document preparation system so you can monitor your transactions.
Notices from the ANZ are also sent to you electronically.
Useful forms and documents
Customer application forms
- Letter of Credit Presentation Form (PDF 572kB)
- Collection lodgement (PDF 520kB)
- Standby Letters of Credit (PDF 192kB)
To find out more about our range of export solutions contact our Trade Finance Desk,
Our Reserve Bank Disclosure Statement is available at anz.co.nz or a request for a copy can be made at any branch. A copy of the ANZ Foreign Currency Term Deposit Investment Statement is available at anz.co.nz or on request from any branch of ANZ.
A copy of any applicable product disclosure statement in relation to Global Markets products is available, on request and free of charge, from 0800 107 562 (New Zealand).
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