Letter of Credit Confirmation
To mitigate payment and country risk on LC transactions
- ①Your company (Supplier) enters into contract with Buyer and demands L/C terms with confirmation.
- ②Buyer requests L/C issuance to issuing bank with confirmation as condition.
- ③L/C issuing bank opens L/C with confirmation required.
- ④SMBC advises L/C with confirmation added.
- ⑤Supplier ships the goods (and receive Bills of Lading from shipping company).
- ⑥Supplier presents documents to SMBC
- ⑦SMBC forwards the documents to L/C issuing bank.
- ⑧The Buyer makes payments at maturity.
- ⑨Issuing bank pays to SMBC.
- ⑩SMBC pays to your company.
- ・Additional assurance to your company for payment due from L/C issuing bank
- ・Especially useful for L/C issued from banks with higher credit risk or from high risk country