What instructions must the exporter give the buyer to ensure he obtains a documentary credit confirmed by UBS and hence the assurance that payment will be forthcoming?
The terms of payment set out in the underlying contract should provide for the issuance of a confirmed documentary credit. Based on this provision, the applicant (buyer) will request the issuing bank to have the documentary credit confirmed by the exporter’s bank (= UBS). For the seller, it is however advisable to enquire from UBS beforehand whether such confirmation is possible (due to the bank and country limits in place) and how much it will cost (confirming commission). This is especially important if the goods are to be exported to one of the emerging markets.
Related Questions
- What instructions must the exporter give the buyer to ensure he obtains a documentary credit confirmed by UBS and hence the assurance that payment will be forthcoming?
- Are there clauses in a documentary credit restricting the exporters assurance that he will receive payment?
- When a documentary credit has been confirmed by UBS, can the exporter rely on receiving payment?
