When it comes to foreign trade, letters of credit (L/C) have an exceptional track record as a payment method. Bank Austria avails itself of many different variations of this proven instrument to settle transactions for its clients, helping them to choose the best option for both their import and export transactions.
Export letters of credit
The letter of credit opened by the foreign bank at the buyer’s request is advised - with or without confirmation - by Bank Austria to the exporter. The bank examines the documents which are presented and, if all the terms and conditions of the L/C have been met, makes payment pursuant to the L/C.
Transferable Letter of credit
If the exporter appearing as beneficiary on the L/C in the letter of credit has to buy the goods himself, which he subsequently hopes to deliver, he can, under certain conditions, assign his L/C to the producer in full or in part.
Assignment of letter of credit demands
Given the requisite level of credit-worthiness, amounts which become due and payable at a later date under the L/C (e.g., 90 days after the date of dispatch) can be disbursed immediately to the exporter.
Import letters of credit
When instructed to do so by the importer, Bank Austria will open the requested L/C. The L/C can be issued to be advised at sight or with a deferred maturity, as transferable or not transferable, to be confirmed or to be advised without commitment as well as to be made payable in Austria or abroad.
Back-to-Back letter of credit
This option is largely of interest to transit suppliers, and is used mainly if a simple L/C assignment is not possible or suitable.
Standby-Letters of Credit (SLC)
This is a special L/C form which does not serve as a payment instrument, but rather as a hedge. SLCs are used if the issuance of a conventional bank guarantee is not possible due to foreign regulations (e.g. in the USA).