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Here are the steps necessary for the proper handling of the operations

Step 1: Negotiating the terms and conditions of the documentary credit :

  • Type of letter of credit
  • Terms of use (choice of bank, payment terms)
  • Deadlines (shipping date, deadline for the submission of documents, validity date)
  • Allocation of expenses



Step 2: Sending of a template with opening instructions:

LThe documentary credit’s mandatory information must appear on your template (see “mandatory information” on the website).



Step 3: Receipt of the documentary credit:

As soon as the bank has notified you of the credit, you review the terms and conditions mentioned in the credit. Make sure that no restrictive clauses are included.



Step 4: Modification request:

If, however, you are unable to fulfil your obligations under the documentary credit, you must promptly request the necessary modifications from your customer (applicant).



Step 5: Validation of the documentary credit:

Upon receipt of a notice of modification, if there is one, you must ensure that the terms and conditions are now acceptable.
If the terms and conditions of the credit can be met, you can ship the goods.



Step 6: Collection and verification of the documents:

After the documents have been collected from the stakeholders, they must be checked one after the other in terms of the opening and any modifications.
Start the verification by reviewing lthe most important points :

 

Deadlines:

  • Shipping deadline
  • Deadline for submission
  • Validity date*
Amount / Currency:

  • Tolerance
  • Partial
  • All the required documents (Number of originals)
Contents of the documents:

  • Under the terms of the credit (including additional conditions)
  • According to ICC rules and practices
  • Documents between them



Step 7: Follow-up of the bank presentation:


If your bank (notifying or confirming) identifies Discrepancies upon the presentation of the documents, it is advisable to correct the documents or keep them at the counters, and ask your bank to mention all Discrepancies to the issuing bank “for approval”.