More security in International Trade transactions
This is a written undertaking that is irrevocable between the bank and the client, for the payment to the supplier of goods or services, by presenting a set of previously stipulated documents evidencing the shipment of goods or the provision of services within a given deadline.
Contract type
Opening credit contract between the bank and the applicant (s) (importers), in which the bank grants credit by signature to the applicant (s) under conditions and term defined in the contract.
No contract applies to Millennium bim. It is only contracted and opened at the foreign Bank if ordered by an Importer client.
It guarantees a contract or obligation execution, usable to a certain extent by drawing, accompanied by a simple written declaration by the beneficiary.
Features
Import documentation
- Application for credit opening, completed by the client;
- Pro-forma invoice issued by the supplier;
- Proof of guarantees formalization;
- Commitment letter for submission of Single Document (DU).
Export documentation
- SWIFT message (MT700) received from the issuing bank of the letter of credit abroad;
Types of Guarantees
Real or personal, depending on the case-by-case analysis of the limits or operation.
How to apply
To apply for your letter of credit visit a Millennium bim branch.
Costs
Financial costs in the execution of the documentary credit , have their commissions published in the Bank’s Schedule of Charges and focus on:
- Opening, transfer, extension, increase of value, change and negotiation commission;
- Office expenses.
Methods of use
Irrevocable
Once it is issued, the Bank makes a definitive commitment to the beneficiary to make the agreed payment under the terms and conditions stipulated in the credit. Conditions may only be changed and the credit can be cancelled if the parties agree.
Irrevocable not confirmed
The Intermediate Bank does not attach its confirmation to the credit, so there is no commitment from their part to pay, accept or negotiate. In these cases, the Intermediary Bank shall act as a notifier of the irrevocable payment commitment of the issuing bank.
Irrevocable and confirmed
Although irrevocability endorses the credit of a firm payment commitment from the issuing Bank, beneficiaries sometimes wish to hold an additional guarantee from a Bank in their own country. This guarantee is materialised by confirming the credit.
Transferable
Credit which specifically indicates that it is transferable and may be wholly or partly usable by another beneficiary (second beneficiary) at the request of the first beneficiary. A transferable credit at the time of transfer shall accurately reflect the terms and conditions of the originating credit, including confirmation, where appropriate, except for the following aspects subject to change.
Payment method
When the vendor agrees to receive the product of export at the time of submitting the documents required under the credit, not allowing any payment period deferred to the buyer.
The vendor agrees to the payment term with the buyer (importer) expressed in the commercial contract between them and benefits from the payment guarantee.
The vendor agrees with the buyer (importer) a deferred payment term and may make the sale funds in advance and pay the credit amount with the revenue obtained;
Underlying cash payments and deferred payments. Vendor receives a portion of the credit at sight, the remainder being assumed by letter, or not.
The notifier Bank pays the drawn bills by credit beneficiary and/or documents under a presentation accordingly, advancing or agreeing to advance funds to the beneficiary on or before the date on which the refund is due to the Bank.
