Blog – Page 8 – Letter of Credit Consultancy Services

Presentation – Letter of Credit Documents

Ozgur Eker (CDCS) Letter of Credit Documents, Presentation 29 January 20198 February 2019Letter of Credit Documents, Presentation

Proforma Invoice

In international trade transactions, a proforma invoice is a trade document which states a commitment from the seller (exporter) to sell goods to the buyer (importer) at specified conditions.
A proforma invoice is not a valid invoice in terms of accounting.
Proforma invoices are widely used in today’s international trade transactions in substitution of sales contracts.
For detailed information please visit our proforma invoice page.

Commercial Invoice

Commercial invoice is a type trade document which is used mostly in international trade transactions.
It is a compulsory document that is requested by customs to determine true value of the imported goods, for assessment of duties and taxes.
The description of the goods, services or performance in the invoice must correspond with the description in the letter of credit.
For detailed information please visit our commercial invoice page.

International Sales Contract

Contract of sale is defined as “formal contract by which a seller agrees to sell and a
buyer agrees to buy, under certain terms and conditions spelled out in writing in the
document signed by both parties.
Also called agreement of sale, contract for sale, sale agreement, or sale contract.
A sales contract can cover any kind of sales action such as sales of intellectual
property rights, sales of real estate etc… We will be focusing only on international
contracts for sale of goods.
For detailed information please visit our international sales contract page.

Packing List

Packing list, is an international trade document, used to identify details of the shipment
in terms of packaging.
Packing list normally should not disclose any financial information regarding the shipment such as the total amount of the cargo, unit price of the items or payment terms.
By adding details of the weight you can use a packing list as a weight list or weight certificate without any problem.
For detailed information please visit our packing list page.

Bill of Exchange / Draft

Bill of exchange and draft have the same meaning and it is a financial document.
Bill of exchange defined as an unconditional order in writing, addressed by one person to
another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to or to the order of a specified specified person, person, or to bearer.
There are two main international law exist that govern the bill of exchange as a financial
instrument in international trade transactions. Bills of Exchange Act (1882) and Geneva
Conventions (1930).
For detailed information please visit our bill of exchange page.

Insurance Documents

Cargo insurance is defined as an insurance policy taken up to protect insurance
holder against loss of or damage to the goods during the transportation.
There are 3 main cargo insurance types available for sea and road shipments.
- Institute Cargo Clauses (A) => widest protection coverage
- Institute Cargo Clauses (B)
- Institute Cargo Clauses (C) => minimum insurance coverage
Institute Cargo Clauses (Air) used in air shipments.
For detailed information please visit our cargo insurance documents page.

Inspection Certificate

Pre-shipment inspection, PSI, is a part of supply chain management and an important and reliable quality control method for checking goods’ quality while clients buy from the suppliers.
Main objective objective of the inspection certificate is to satisfy the importer or the
government body that the goods are in conformity with the indicated specifications
on the sales contract or proforma invoice.
Inspections are important tools to reduce trade risks and avoid fraud.
For detailed information please visit our Inspection Certificate page.

Multimodal Bill of Lading

Both multimodal bills of lading are transport documents covering transportation completed by more than one mode of transport.
Multimodal bills of lading are mostly printed on standard forms supplied by International Federation of Freight Forwarders Associations (FIATA) .
Multimodal Bills of Lading and Combined Transport Bills of Lading has the same meaning and application in terms of letters of credit rules.
For detailed information please visit our Multimodal Bill of Lading page.

Bill of Lading

Bill of lading is a transport documents used in sea shipments.
A bill of lading is an instrument in writing, signed by a carrier or his agent, describing the freight so as to identify it, stating the name of the consignor. The terms of the contract for carriage, and agreeing or directing that the freight be delivered to the order or assigns of a specified person at a specified place.
Bills of lading fulfill three basic functions :
- bills of lading are receipts for the goods;
- bills of lading evidence the terms of the contract of carriage
- they are said to be “negotiable documents of title”
For detailed information please visit our Bill of Lading page.

Non-Negotiable Sea Waybill

Non-negotiable sea waybill or Non-Negotiable Bill of Lading is a transport document used in sea shipments.
A sea waybill is non-negotiable, which means that the consignee cannot endorse the sea waybill and transfer it to another person to take delivery delivery of the cargo.
Non-negotiable sea waybill is covered under article 21 of the UCP 600.
To comply with UCP 600 article 21, a non-negotiable sea waybill must appear to cover a port-to-port shipment but need not be titled “Non-negotiable Sea Waybill” or similar.
For detailed information please visit our Non-Negotiable Sea Waybill page

Charter Party Bill of Lading

Container transportation may not be suitable for some occasions such as bulk commodity trades and heavy lift/out of gauge movements. On these occasions, in which liner services could not be utilized, shippers may choose to hire a vessel as an alternative.
Hiring a vessel is called “Charter Party” in maritime terminology.
Transport document issued by the hiring party of the vessel, or charterer as we call them, is called “Charter Party Bill of Lading“.
Charter party bill of lading is covered under article 22 of the UCP 600.
For detailed information please visit our Charter Party Bill of Lading page

Air Transport Document

Air transport document or air waybill (AWB) is a transport document used in air shipments.
Air waybill is “the shipping document used for the transportation of air freight. It includes conditions, limitations of liability, shipping instructions, description of commodity, and applicable transportation charges.
Air transport document is not a document title of goods, which means that air waybill is a non-negotiable transport document.
If a letter of credit requires presentation of an air transport document covering an airport-to airport shipment, UCP 600 article 23 is applicable.
For detailed information please visit our Air Transport Document page.

Road Transport Document

Road transport document or road consignment note is a transport document used in land shipments.
Road transport document is “the shipping document used for the transportation of land
freight. Road transport document that confirms that the carrier (ie the road haulage company) has received the goods and that a contract of carriage exists between the trader and the carrier.
Road transport document is not a document title of goods, which means that road transport document is a non-negotiable transport document.
“CMR International Consignment Note” is the transport document created in standard forms according to CMR convention. CMR Convention is signed by most of the EUROPEAN countries.
For detailed information please visit our Road Transport Document page.

Rail Transport Document

Rail transport document or rail consignment note is a transport document used in
rail shipments. Rail consignment note confirms that the rail carrier has received the
goods and that a contract of carriage exists between trader and carrier.
Rail transport document is not a document title of goods, which means that rail
transport document is a non-negotiable transport document.
“CIM Rail Consignment Note” is the transport document created in standard forms
according to CIM convention rules. CIM Convention is signed by around 50
countries.
For detailed information please visit our Rail Transport Document page.

Presentation – Types of Letters of Credit

Ozgur Eker (CDCS) Presentation 28 January 20198 February 2019Letter of Credit Types, Presentation

Commercial Letters of Credit

Commercial credits are used mainly in export and import transactions of tangible goods.
Majority of commercial letters of credit are issued subject to the latest version of UCP (Uniform Customs and Practice for Documentary Credits).
UCP (Uniform Customs and Practice for Documentary Credits) are the set of rules that governs the commercial letters of credit procedures.

Standby Letters of Credit

Standby credits are used mainly in contraction projects as well as export and import transactions of tangible goods.
Majority of standby letters of credit are issued subject to the latest version of ISP (International Standby Practices).
ISP (International Standby Practices) are the set of rules that governs the Standby letters of credit procedures.

Irrevocable Letter of Credit

Irrevocable means not to be revoked or recalled; unalterable according to Kernerman Webster’s College Dictionary.
Irrevocable Letter of Credit is a type of letter of credit which can not be cancelled or amended without the written agreement of the credit parties.
If credit is unconfirmed unconfirmed than beneficiary beneficiary and issuing issuing bank must reach an agreement on the amendments.
If credit is confirmed than beneficiary, issuing bank and confirming bank must reach an agreement on the amendments.
All credits issued subject to UCP 600 are irrevocable unless otherwise specified.

Revocable Letter of Credit

Revocable means capable of being revoked; able to be cancelled according to Kernerman Webster’s College Dictionary.
Irrevocable Letter of Credit is a type of letter of credit which can be cancelled at any time without prior notification to the beneficiary.
Revocable credits can not be confirmed. So all revocable credits are
need to be unconfirmed.
Revocable credits can not be confirmed. So all revocable credits are
need to be unconfirmed.
Unconfirmed credits can be amended or cancelled by the issuing bank at any time without prior agreement of the beneficiary.
All credits issued subject to UCP 600 are irrevocable unless otherwise specified.
Revocable credits can still be issued subject to UCP 500.

Transferable Letter of Credit

Transferable Letters of Credit are suitable for triangle trade. Triangle trade is a trade where a middleman exist between the buyer (importer) and the seller (exporter).
Transferable letter of credit issued in favor of the middleman. Then middleman transfers part of the credit to the ultimate supplier of the goods.
Middleman’s Middleman’s commission commission is the difference difference of these two credit amounts amounts. (issued amount-transferred amount=commission of the middleman)
Transferable Letters of Credit can be issued subject to UCP 600.
Transferable credit can be transferred more than one beneficiary. (partial transfer is allowed)
Transferred credits can not be transferred to another second beneficiary once more.

Back-to-Back Letter of Credit

Back-to-Back Letters of Credit are suitable for triangle trade. Triangle trade is a trade where a middleman located between the buyer (importer) and the seller (exporter).
There are two separate letters of credit exist in a back-to-back letter of credit transaction.
- Buyer issues 1st. letter of credit in favor of the middleman middleman.
- Middleman issues 2nd. letter of credit in favor of the ultimate supplier of the goods.
As back-to-back letters of credit contain two independent credits, issuing bank of the 2nd letter of credit has to bear substantial amount of payment risk. For this reason back-to-back letters of credit are rarely used in international trade.

Revolving Letter of Credit

If buyer and seller are trading the same commodity regularly on a certain period of time than they may choose to work with a revolving letter of credit instead of issuing a new LC every shipment.
Buyer’s bank (issuing bank) issues a letter of credit that replenishes either in value or in time.
Revolves by value : Letter of credit is reissued automatically when credit amount is utilized.
Revolves by time : an amount is available in fixed installments over a period

Presentation – Parties to the Letter of Credit

Ozgur Eker (CDCS) Presentation 28 January 20198 February 2019Advising Bank, Applicant, Beneficiary, Confirming Bank, Issuing Bank, Nominated Bank, Presentation, Reimbursing Bank

Issuing Bank

Issuing Bank is the bank that issues a letter of credit at the request of an applicant or its own behalf.
Letter of credit is issuing bank’s payment promise against a complying presentation.
Most of the time issuing issuing banks receive receive the conditions conditions of the letters of credit from applicants through LC Application Forms.
Once an issuing bank opens an LC it undertakes to honor a complying presentation of the beneficiary without recourse.

Applicant

Applicant is the buyer of the underlying transaction.
Applicant is the party on whose behalf the letter of credit is issued.
Applicants complete Letter of Credit Application Forms to pass the details details of the letter of credit to issuing issuing banks via online forms or hard copy.
Once letter of credit is issued applicant removes from the lc equation in terms of payment obligation. Issuing banks must honor complying presentations independently and irrevocably.

Beneficiary

Beneficiary is the seller of the underlying transaction.
Beneficiary is the party in whose favor the letter of credit is issued.
Beneficiary ships the goods as required by the letter of credit and presents presents documents documents as indicated indicated.
Beneficiary will gets its money from the issuing bank as long as it complies with the letter of credit conditions.
Beneficiaries prove their compliance to the letter of credit conditions by making complying presentations to the banks.

Advising Bank

Advising bank is the bank that passes letter of credit to the beneficiary. UCP 600 describes advising bank as « the bank that advises the credit at the request of the issuing bank»
Advising banks mostly located on the same country with the beneficiaries.
Advising banks have very limited responsibilities against beneficiaries. Their main responsibility is to advise the credit to the beneficiaries.
They have no payment obligation unless they are also the confirming bank.

Nominated Bank

Nominated bank is the bank with which the credit is available.
Most of the time nominated banks are also the advising banks.
Nominated banks may honor a complying presentation. But their payment responsibility is not obvious. If they choose not to honor a complying presentation, there is no penalty mechanism defined in the letter of credit rules, UCP 600, for such an activity

Confirming Bank

Confirming bank is the bank that adds its confirmation to a credit upon the issuing bank’s authorization or request.
Most of the time a confirming bank is also the advising bank and the nominated bank.
Confirming Confirming bank provides provides beneficiary beneficiary an additional payment guarantee separate from the issuing bank’s payment obligation.
Confirming banks are located on the same country as beneficiaries so they will eliminate country risk of the issuing banks.

Reimbursing Bank

Reimbursing Bank : Reimbursing Bank shall mean the bank instructed and/or authorized to provide reimbursement pursuant to a reimbursement authorization issued by the issuing bank.

Presentation – What is a Letter of Credit?

Ozgur Eker (CDCS) Presentation 27 January 20198 February 2019Letter of Credit Definition, Presentation

What is a Letter of Credit?

By reading this presentation, you will gather some basic yet very important information regarding the letters of credit.

Understanding the Letter of Credit

Letter of credit is a payment method in international trade.

Other payment methods in international trade are Cash in Advance, Documentary Collections, Open Account and Bank Payment Obligation.

Synonyms of the Letter of Credit

Common definitions used to identify the letter of credit term with the same meaning are:

Documentary Credit
Documentary Letter of Credit
Documentary Commercial Letter of Credit
Credit
Commercial Letter of Credit
Standby Letter of Credit

Letter of Credit Definition

UCP 600 defines letter of credit as:

“Credit means any arrangement, however named or described, that is irrevocable and thereby constitutes a definite undertaking of the issuing bank to honour a complying presentation.”

Letter of Credit Rules

ICC, International Chamber of Commerce, publishes the letter of credit rules.
Letter of credit rules are called UCP, Uniform Customs and Practice for Documentary Credits.
Letter of credit rules are regularly updated by ICC.
Latest set of letter of credit rules is called UCP 600.

Parties in a Letter of Credit Transaction

Main parties involved in a letter of credit transaction are indicated below;

Issuing Bank
Beneficiary
Applicant
Advising Bank
Nominated Bank
Confirming Bank
Reimbursing Bank

USA Letter of Credit Transactions

Ozgur Eker (CDCS) Countries, USA 25 January 20196 April 2019Letter of Credit Transactions by Countries, USA, USA Letter of Credit Transactions

You should understand USA economy, USA exports and imports as well as US banks before you proceed to work with an US letter of credit.

The United States of America’s Economy and International Trade at a Glance:

Gross domestic product of USA is 15.6 trillion US dollars in year 2013. This makes the US economy largest economy in the world.
USA is the world’s biggest importer with 2.31 trillion US dollars volume and 3rd biggest exporter with 1.49 trillion US dollars volume in year 2013.
US Dollar is the main reserve currency in today’s economic system. Most of the international trade transactions are handled by US Dollar. For example when you buy a 20ft container of textile from China you most probably pay by US dollars whichever country you may locate.
USA is one of the least risky countries in the world in terms of financial, economic and politic stability factors.
Most of the big global companies are originated from USA.
Although USA has s strong and well established finance system, last global financial crises hit hard to US financial institutions. Even biggest US banks had to be rescued by US government as a result of unwanted effects of global financial crisis.
Trade deficit or, a trade gap, is one of the key problems in US economy. US has been covering its trade deficit by the help of direct foreign investment and borrowing for decades. As a result USA has a very high level of external debt stock at the moment.

Biggest Banks in USA and their SWIFT Codes:

Bank Name	Assets (Billion USD)	Swift Code
Bank Name: JP Morgan Chase	Assets (Billion USD): 2,265.8	Swift Code: CHASUS33
Bank Name: Bank of America Corp.	Assets (Billion USD): 2,136.6	Swift Code: BOFAUS3N
Bank Name: Citigroup Inc.	Assets (Billion USD): 1,873.9	Swift Code: CITIUS33
Bank Name: Wells Fargo	Assets (Billion USD): 1,313.9	Swift Code: WFBIUS6S
Bank Name: Goldman Sachs Group	Assets (Billion USD): 923.7	Swift Code: GOLDUS33
Bank Name: Morgan Stanley	Assets (Billion USD): 749.9	Swift Code: MSNYU33
Bank Name: U.S. Bancorp	Assets (Billion USD): 340.1	Swift Code: USBKUS44
Bank Name: HSBC North America Holdings Inc.	Assets (Billion USD): 331.4	Swift Code: MRMDUS33

United Kingdom Letter of Credit Transactions

Ozgur Eker (CDCS) Countries, United Kingdom 25 January 20196 April 2019Letter of Credit Transactions by Countries, United Kingdom, United Kingdom Letter of Credit Transactions

You should understand United Kingdom economy, United Kingdom exports and imports as well as United Kingdom banks before you proceed to work with a letter of credit which is issued in United Kingdom.

Economy of United Kingdom and International Trade at a Glance:

Gross domestic product of United Kingdom is $2,43 trillion US dollars in year 2012. This makes United Kingdom economy 7th largest economy in the world after USA, China, Japan, Germany, France and Brazil.
United Kingdom is the world’s 5th biggest importer with 642,60 billion US dollars import volume in year 2012 and 10th biggest exporter with 474,60 billion US dollars export volume in year 2012.
International trade has been playing a significant role on United Kingdom economy.
United Kingdom economy experiencing significant trade deficits for the last couple of years which means that annual United Kingdom exports are less than annual United Kingdom imports.
United Kingdom economy is one the leading forces of the European Union economy at the moment just after Germany and France.
Main export products of United Kingdom : Transport Equipment (16 percent); Chemical Products (10 percent of total exports); Machinery and Equipment (9 percent); Computer, Electronic and Optical Products (8 percent); Pharmaceutical Products (8 percent); Refined Petroleum Products (7 percent) and Basic Metals (6 percent)
Main import products of United Kingdom : Computer, Electronic and Optical Products (11 percent); Transports Equipment (14 percent); Chemical Products; Food and Beverages; Chemical products; Apparel, Textiles and Leather; Basics Metals and Refined Petroleum Products.
Biggest Export Partners of United Kingdom : United States (13 percent) and Euro Area countries with Germany, Netherlands, France, Ireland, Belgium, Italy and Spain.
Biggest Import Partners of United Kingdom : China (8 percent), United States (7 percent), Norway (6 percent) and European Union countries with Germany, Netherlands, France, Belgium, Italy and Ireland.

Biggest Banks in United Kingdom and their SWIFT Codes:

Bank Name	Assets (Billion USD)	Swift Code
Bank Name: HSBC Bank PLC	Assets (Billion USD): 2.693,00	Swift Code: MIDLGB22
Bank Name: Barclays PLC	Assets (Billion USD): 2.420,00	Swift Code: BARCGB21
Bank Name: Royal Bank of Scotland	Assets (Billion USD): 2.131,00	Swift Code: RBOSGB2L
Bank Name: Lloyds Banking Group plc	Assets (Billion USD): 1.529,00	Swift Code: LOYDGB2L
Bank Name: Standard Chartered PLC	Assets (Billion USD): 637,00	Swift Code: SCBLGB2L

Netherlands Letter of Credit Transactions

Ozgur Eker (CDCS) Countries, Netherlands 24 January 20196 April 2019Letter of Credit Transactions by Countries, Netherlands, Netherlands Letter of Credit Transactions

You should understand Netherlands economy, Netherlands exports and imports as well as Netherlands banks before you proceed to work with a letter of credit which is issued in Netherlands.

Economy of Netherlands and International Trade at a Glance:

Gross domestic product of Netherlands is $770,60 billion US dollars in year 2012. This makes Netherlands economy 18th largest economy in the world after USA, China, Japan, Germany, France, United Kingdom, Brazil, Russia, Italy, India, Canada, Australia, Spain, Mexico, South Korea, Indonesia and Turkey.
Netherlands is the world’s 10th biggest importer with 474,80 billion US dollars import volume in year 2012 and 7th biggest exporter with 538,50 billion US dollars export volume in year 2012.
International trade has been playing a significant role on Netherlands economy. Netherlands exports reached to 82,9% of its Gross Domestic Product in year 2012 according to IMF. These data show us that Netherlands is one of the most export oriented nations in the world.

Figure 1 : Netherlands Export of Goods and Services (percent of GDP) (Source :IMF)

Figure 1 shows Netherlands export of goods and services percent of GDP between 2005-2012. Netherlands exports / Netherlands GDP will be as follows for the corresponding years:
2005 : 65,2%
2006 : 68,7%
2007 : 70,5%
2008 : 71,3%
2009 : 62,9%
2010 : 72,8%
2011 : 78,2%
2012 : 82,9%

Netherlands has a positive trade balance which means that its exports is higher than its imports. Even global economic crises could not change this positive trade balance status. Netherlands also has a positive current account thanks to its strong balance of trade surpluses. Current account is the sum of the balance of trade (i.e., net revenue on exports minus payments for imports), factor income (earnings on foreign investments minus payments made to foreign investors) and cash transfers.

Figure 2 : Netherlands Current Account Balance (Billion U.S. Dollars)

In year 2011 and 2012 Netherlands had a record high current account surpluses of 78,82 billion USD and 72,73 billion USD respectively.

Main export products of Netherlands: Petroleum oils, refined (12%), Automatic data processing machines (3%), Petroleum oils, crude (3%), Medicaments, packaged (3%), Machines and mechanical appliances having individual functions(2%).
Main import products of Netherlands: Petroleum oils, refined (9%), Petroleum oils, crude (5%), Automatic data processing machines (5%), Medicaments, packaged (3%), Cars (3%).
Biggest Export Partners of Netherlands: Germany (19%), Belgium-Luxembourg (16%), United Kingdom (9%), France (6%), Italy (6%).
Biggest Import Partners of Netherlands: Germany (16%), China (10%), Belgium-Luxembourg (10%), United States (7%), United Kingdom (6%).

Biggest Banks in Netherlands

ING Bank: ING (International Netherlands Group) is a global financial institution offering banking, investments, life insurance and retirement services.

ING’s operations are focused on its home Benelux market, as well as the rest of Europe, Asia/Pacific, and North America.

One of the world’s largest insurance and financial services companies. The Group was created in 1991 by a merger between Nationale-Nederlanden and NMB Postbank Group. At August 9, 2013, it had a market cap of over $43.0 billion.

Assets: 1.526,57 billion USD SWIFT Code: INGBNL2A

Rabobank Group: Rabobank is the market leader in Dutch retail savings, residential mortgages (31%), and SME banking.

It operates in 48 countries and serves approximately 10 million clients. Rabobank has the highest credit rating AAA from both Standard & Poor’s and Moody’s, and AA+ from Fitch.

Assets: 942 billion USD SWIFT Code: RABONL2U

ABN Amro Bank: ABN AMRO is a multinational universal bank servicing retail, private and commercial banking clients. ABN AMRO has a long and rich history reaching back almost 300 years.

The current structure of ABN AMRO Group is a result of various steps taken over the past period, ultimately resulting in the Legal Merger between ABN AMRO Bank and Fortis Bank Nederland as subsidiaries of ABN AMRO Group as at 1 July 2010.

The Dutch State holds all ordinary shares of ABN AMRO Group and has full control over ABN AMRO Group with a total financial interest of 97.8%. The remaining 2.2% is held by institutional investors via ABN AMRO Preferred Investments.

Assets: 531billion USD SWIFT Code: ABNANL2A

Japan Letter of Credit Transactions

Ozgur Eker (CDCS) Countries, Japan 24 January 20196 April 2019Japan, Japan Letter of Credit Transactions, Letter of Credit Transactions by Countries

You should understand Japanese economy, Japanese exports and imports as well as Japanese banks before you proceed to work with a letter of credit which is issued in Japan.

Japan’s Economy and International Trade at a Glance:

Gross domestic product of japan is 4.78 trillion US dollars in year 2012. This makes
Japanese economy 3rd largest economy in the world after USA and China.
Japan is the world’s 4th biggest importer with 794,70 billion US dollars import volume in year 2011 and 4th biggest exporter with 792,90 billion US dollars export volume in year 2012.
Japan is one of the most successful countries all around the world that uses export oriented development strategy. japan economy flourished with the help of its export oriented companies after world war II. Japan is now one of the most develop countries.
Until recently Japanese economy experiencing trade surpluses. For the last couple of years Japan imports exceed its exports and Japan began to see trade deficit on its international trade balance sheet.
Most of the big global companies are originated from USA.
Biggest Export Partners of Japan : China (%18.88), USA (%16.42), South Korea (% 8.13), Taiwan (% 6.27), Hong Kong (% 6.27).
Biggest Import Partners of Japan : China (% 22.2), USA(% 10.96), Australia (% 6.29), Saudi Arabia (% 5.29), UAE (% 4.12), South Korea (% 3.98), Indonesia (%3.95).

Biggest Banks in Japan and their SWIFT Codes:

Bank Name	Assets (Billion USD)	Swift Code
Bank Name: Mitsubishi UFJ Financial Group	Assets (Billion USD): 1,999.60	Swift Code: MTBCJPJTXXX
Bank Name: Mizuho Financial Group	Assets (Billion USD): 1,538.90	Swift Code: MHCBJPJTXXX
Bank Name: Sumitomo Mitsui Financial Group	Assets (Billion USD): 1,202.60	Swift Code: SMBCJPJTXXX
Bank Name: Resona Holdings	Assets (Billion USD): 400.47	Swift Code: DIWAJPJTXXX
Bank Name: Sumitomo Trust & Banking	Assets (Billion USD): 213.85	Swift Code: STBCJPJTXXX
Bank Name: Chuo Mitsui Trust Group	Assets (Billion USD): 150.79	Swift Code: MTRBJPJTXXX

Italy Letter of Credit Transactions

Ozgur Eker (CDCS) Countries, Italy 24 January 20196 April 2019Italy, Italy Letter of Credit Transactions, Letter of Credit Transactions by Countries

You should understand Italy economy, Italy exports and imports as well as Italy banks before you proceed to work with a letter of credit which is issued in Italy.

Economy of Italy and Its International Trade at a Glance:

Gross domestic product of Italy is $2,19 trillion US dollars in year 2012. This makes Italian economy 8th largest economy in the world after USA, China, Japan, Germany, France, Brazil and UK. Italy is the third largest economy of the Eurozone after Germany and France.
Italy is the world’s 11th biggest importer with 453,50 billion US dollars import volume in year 2012 and 9th biggest exporter with 478,90 billion US dollars export volume in year 2012.
International trade has been playing a significant role on Italian economy. Italian companies are famous for its quality products in global scale on different type of goods such as healty food, automobiles, textile, machinery, eye glasses and many more.
Italian economy hit hard by the last global economic crises. Italian economy is one of the most badly effected economy in EU. Italian GDP has declined by 6.9% since the start of the financial crises in year 2008. You can have a look at the Italian economic’s current situation after the last financial crises from this link.)
Main export products of Italy : Precision machinery (18%); metals and metal products (13%); clothing and footwear (11%); motor vehicles including luxury vehicles, motorcycles and scooters (10%), pharmaceuticals and other chemicals (7%) and food (6%).
Main import products of Italy : Fuel (17%), motor vehicles (10%), raw minerals (10%), chemicals (9%), electronic devices (8%) and food (7%).
Biggest Export Partners of Italy : Germany (13%), France (12%), United States (6%), Switzerland (6%) and Spain (5%).
Biggest Import Partners of Italy : Germany (16%), France (8%), China (7%), Netherlands (5%) and Spain (5%).

Biggest Banks in Italy and their SWIFT Codes:

Bank Name	Assets (Billion USD)	Swift Code
Bank Name: UniCredit SPA	Assets (Billion USD): 1,219,53	Swift Code: UNCRIT2V
Bank Name: Intesa Sanpaolo SPA	Assets (Billion USD): 841,14	Swift Code: BCITITMM
Bank Name: Banca Monte dei Paschi de Siena SPA	Assets (Billion USD): 316,73	Swift Code: PASCITMM
Bank Name: Banco Popolare SPA	Assets (Billion USD): 176,49	Swift Code: BPVIIT22
Bank Name: UBI Banca SPA	Assets (Billion USD): 170,80	Swift Code: BEPOIT21
Bank Name: Mediobanca SPA	Assets (Billion USD): 99,20	Swift Code: BAMEITMM

Germany Letter of Credit Transactions

Ozgur Eker (CDCS) Countries, Germany 21 January 201925 July 2022Germany, Germany Letter of Credit Transactions, Letter of Credit Transactions by Countries

Germany is a country in Central and Western Europe, lying between the Baltic and North Seas to the north, and the Alps to the south.

Germany borders Denmark to the north, Poland and the Czech Republic to the east, Austria and Switzerland to the south, France to the southwest, and Luxembourg, Belgium and the Netherlands to the west. (1)

International trade has been playing a key role on German economy for centuries.

Germans are famous for their quality products. “Made in Germany” is a reliable quality mark and is a strong reason of choice to buy a product all around the world.

In Germany the share of industry in gross value added is 22.9 per cent, making it the highest among the G7 countries.

The strongest sectors of Germany are vehicle construction, electrical industry, engineering and chemical industry.(2)

Germany is a member of the European Union and using EU’s currency EURO (EUR) since 2002.

German economy is the driving force of the European Union economy. Other European countries rely on Germany to keep their economies and finances functioning properly.

On this page you can find brief information in regards to German economy, key points of its international trade, banks in Germany and letter of credit usage tips specific to Germany.

Letter of Credit Services for German Exporters

We will be more than happy helping German exporters with their letter of credit transactions.

Small or big, every customer welcomes. We mainly work with manufacturing companies.

Germany Exports at a Glance:

Germany is an exporting machine. Germany experiencing trade surpluses for decades.

In binary trade relations, Germany exports more than its imports from majority of countries all around the world with limited exceptions such as China, Saudi Arabia etc…

As of 2017 Germany is the 3rd biggest exporting country in the world. Germany’s 2017 exports declared as 1 trillion 420 billion US dollars in value.

Breakdown of Germany’s total exports by main commodity groups are: agricultural products %6.6, fuels and mining products %4.2, manufactures %86.9.

The most significant export destinations of Germany are European Union %57.8, the United States of America %8.7, China %6.7, Switzerland %4.3 and Russian Federation %2.1.

Top Exported Products of Germany (2017)

Agricultural Goods	Non-Agricultural Goods
Chocolate and other cocoa food	Motor cars for transport of persons
Swine meat, fresh, chilled, frozen	Parts for motor vehicles 8701-8075
Cheese and curd	Medicaments in measured doses
Bread, pastry, other bakers' wares	Other aircraft
Other food preparations	Human and animal blood

Germany Imports at a Glance:

Germany is the 3rd top importing country as of 2017 statistics. The import trade value of Germany in 2017 declared as USD 1 trillion 167 billion.

Breakdown of Germany’s total imports by main commodity groups are: agricultural products %10.2, fuels and mining products %11.1, manufactures %76.9.

Germany’s major import trading partners are European Union, China, the United States of America, Switzerland and Japan.

Agricultural Goods	Non-Agricultural Goods
Cheese and curd	Motor cars for transport of persons
Coffee	Parts for motor vehicles 8701-8075
Wine of fresh grapes	Petroleum oils, crude
Rape or colza seeds	Automatic data-processing machines
Chocolate and other cocoa food	Petroleum gases

Banks in Germany

Deutsche Bank: Deutsche Bank, which is one of the biggest banks in Germany, was founded in 1870. Deutsche Bank has a strong position in Europe and a significant presence in the Americas and Asia Pacific.

SWIFT Code: DEUTDEFF

Commerzbank: Commerzbank is a leading international commercial bank with branches and offices in almost 50 countries. Commerzbank finances approximately 30% of Germany’s foreign trade and is leading in financing for corporate clients in Germany.

SWIFT Code: COBADEFF

KfW Bankengruppe: Founded in 1948, KFW Bankgruppe is a Government-owned development bank. Kreditanstalt Fuer Wiederaufbau – KFW operates as a promotional bank. It provides financing for investments, projects by German and European companies, and for economic and social initiatives in developing countries, as well as advisory services.(3)

SWIFT Code: KFWIDEFF

HypoVereinsbank (UniCredit Bank AG) : HypoVereinsbank is one of the leading private banks in Germany. HypoVereinsbank is a subsidiary of UniCredit Group.

UniCredit Bank AG (HVB), formerly Bayerische Hypo- und Vereinsbank Aktiengesellschaft headquartered in Munich, was formed in 1998 through the merger of Bayerische Vereinsbank Aktiengesellschaft and Bayerische Hypotheken- und Wechsel-Bank Aktiengesellschaft. It is the parent company of HVB Group. HVB has been an affiliated company of UniCredit S.p.A., Milan, Italy (UniCredit), since November 2005 and
hence a major part of the UniCredit corporate group as a subgroup. (4)

SWIFT Code: HYVEDEMM

Landesbank Baden-Württemberg: Headquartered in Stuttgart, LBBW is one of the biggest banks in Germany with total assets worth EUR 238 billion. LBBW is owned by the Federal State of Baden-Württemberg, the Savings Bank Association of Baden-Württemberg and the City of Stuttgart.

SWIFT Code: SOLADEST

Bayerische Landesbank (Bayern LB): Bayerische Landesbank is a publicly regulated bank based in Munich, Germany and one of the eight Landesbanken. It is 94% owned by the free state of Bavaria and 6% owned by the Sparkassenverband Bayern, the umbrella organization of Bavarian Sparkassen.

With a balance of €416 billion and 19,200 employees (in the group; 5,170 in the bank itself), it is the eighth-largest financial institution in Germany.(5)

SWIFT Code: BYLADEMM

Letter of Credit Usage Tips Specific to Germany:

Tips to the Importers:

Germany has very limited natural resources.
German companies are exporting almost all types of manufacturing goods. They are very good at quality.
German banks are very strong both in terms of capital ratios and international establishment.
Working with German exporters should not possess any significant risk factors for the importers.
Try to establish a simple and well defined letter of credit in order to complete the transaction smoothly.

Tips to the Exporters:

Germany has a low political and credit risks, a very robust banking sector and an excellent business climate.
As a result accepting a letter of credit issued by a German bank should not inherit any additional risks. Following standard letter of credit control procedures and conducting a simple fraud risk examination should be sufficient.
German banks occasionally confirm letters of credit issued by some of the African countries such as Ethiopia, Kenya etc. These credits are not originally issued in Germany, as a result possesses higher risk factors.