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When making any trade transactions securing the payments becomes an issue of the utmost importance.

Due to that, many companies refer to such banking products as: letters of credit, documentary collections and bank guarantees. Together with that, bank guarantees are very important for the local scale business transactions in Georgia.
We offer you a full range of trade finance products designed to meet your actual needs.


LETTER OF CREDIT (LC)
 

Letter of Credit allows making international trade transactions and is mainly used to ensure the payment of goods and services.
Letter of credit is a bank liability to pay the seller of goods or services a fixed amount of sum upon provision by the latter of documents stipulated by the letter of credit. Letter of Credit is used by both parties - the Exporter (AKA the seller) and the Importer (AKA buyer)


ON TOP OF THAT WE OFFER:
 

  • Approval of the letter of credit in the main currencies and in large number of countries;  
  • Handling the letters of credit on personal and professional basis; 
  • Professional expertize and consultancy related to the documents; 
  • Immediate notification of the reception of letters of credit;

 

Note: From a legal standpoint, letters of credit are separate from purchase or other main contracts. In case of the opening the letter of credit it is only documents that the issuing banks deal with not the goods and/or services. Only after all the relevant documents have been presented to comply with the terms of the letter of credit will bank make payment decision.
For a more in-depth overview, please contact documentary operations’ specialist of the Bank of Georgia.


LC ADVANTAGES FOR THE IMPORTER/BUYER:
 

  • Most acceptable form of payment for the seller;
  • Confirmation of own solvency;
  • Reception of necessary documents;
  • Adaptability to sale contract;
  • More payment deferral possibilities;
  • More Legal protection;
  • Desired delivery conditions;
  • Control over dates of delivery and documents;
  • Business growth possibilities.


LC ADVANTAGES FOR THE EXPORTER/SELLER:
 

  • Collection assurance, in case of approved transaction
  • Easier financing;
  • Bank processing;
  • Legal protection;
  • Adaptability to sale contract;
  • Speed of collection;
  • Control of documents up to time of payment ;
  • Greater business possibilities;


DOCUMENTARY COLLECTION 
 

Documentary collection (or cash against documents, CAD) is a form of a payment used in international trade, most commonly in operations dealing with commodities.


THE TERMS OF DOCUMENTARY COLLECTION MAY STIPULATE :
 

  • Documents against payment;
  • Documents against acceptance

The above-mentioned terms should be negotiated when making a purchase contract.


MANDATORY TERMS AND CONDITIONS:
 

  • It is required that the seller and buyer know each-other in their capacity as trustworthy partners;
  • Stable economic and political situation in the country of buyer;
  • No suspicion of risks related to currency control or import restrictions;
  • The settlement procedure is regulated by the Uniform Rules for Collections (URC) issued by the International Chamber of Commerce in Paris. Fulfillment of the above mentioned terms is mandatory for all parties involved;
  • Bank is not in charge to revise the documents and it is not involved in a main settlement.

 

For additional consultancy please refer to the documentary operations unit representative of the Bank of Georgia.