Procedures:
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Buyer send LOI
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Seller mandate send SCO
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Buyer send ICPO and POF
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Seller send FCO and buyer sign and return.
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Seller sends Draft SPA (Sales Purchase Agreement) within five (5) business days. Buyer reviews, and makes necessary corrections to the Draft SPA, and then signs and returns it to the Seller. The Seller reviews and sends the final SPA. Both sign and stamp.
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Until 5 days after signing the SPA, the buyer issues a financial instrument draft for the seller's approval. 7 to 10 days after signing the SPA, the buyer must issue the financial instrument according to the draft, confirmed by the world's top bank 25/50.
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Shipment commences as agreed within the SPA usually within (25-40 days) depending on the Port, and after confirmation of the Operative Instrument is confirmed by Seller’s Bank
What Is a Letter of Credit?
A letter of credit, or a credit letter, is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. If the buyer is unable to make a payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase. It may be offered as a facility (financial assistance that is essentially a loan).
Due to the nature of international dealings, including factors such as distance, differing laws in each country, and difficulty in knowing each party personally, the use of letters of credit has become a very important aspect of international trade.
