Export Letter of Credit

After necessary negotiations with the buyers of the goods, exporters arrange for conclusion of a sale contract and present their proforma invoice to the buyers. The buyer, observing internal regulations of the country of destination, arranges for opening a letter of credit in favour of the Iranian seller, through one of the reputable foreign banks or Iranian banks' foreign branches. The Iranian bank takes the following measures after receipt of the LC.
1) Reviews the status of the LC opening bank
2) Advises the LC to the beneficiary (seller) and acknowledges receipt of the LC to the correspondent.
3) Advises the next issued amendments to the beneficiary.
4) Advises seller's opinion to the correspondent regarding acceptance or not acceptance of the LC or issued amendments.
5) Obtains commissions from buyer or seller according to the FX services tariff of the bank and LC conditions.
6) Receives the required shipment documents from the exporter of goods and services.
7) Reviews the documents and checks them according to the LC conditions and advises possible discrepancies to the seller for making necessary amendments.
8) Draws up the bank's schedule and forwards shipment documents to the correspondent bank through express post.
9) Follows up and collects FX proceeds of the documents from correspondent.
10) Credits the proceeds to the exporter's FX account.
11) Buys the FX amount resulted from export of the goods at current rate and credits the IRR equivalent to the exporter's account if requested by the applicant.
12) Issues confirmation to be delivered to Iran Export Development Centre and /or Ministry of Commerce if requested by the applicant.

Validity and Conditions of the Export LC:

The applicant should exactly control the conditions of the LC according to the concluded contract and pro-forma invoice and advise this bank of the possible discrepancies to be amended. In case of compliance of the LC with terms and conditions of the contract and proforma invoice, the exporter should prepare shipping documents and other required documents and present them to the FX branch of the bank.

If the exporter does not accept the conditions of the LC, the bank should be informed of that in order to advise the correspondent bank of non acceptance of the documents so that the correspondent bank can advise the same to the buyer.

The bank , forwards the received documents together with the provided schedule to the correspondent bank and arranges for crediting the exporter’s account , in foreign exchange or IRR equivalent ( according to the exporter’s request ), after receiving the proceeds .

Commission of the offered services :

The bank receives commissions, according to the bank’s tariff for the FX services, for the following operations:

1) Advising of the LC and relative amendments to the beneficiary/ exporter
2) Cancellation of the LC
3) Negotiation of the documents and payment of the amount of the LC
4) Forwarding the received LC, upon exporter’s request, to other banks, inside and outside of the country, for advising of the LC or negotiation of the documents.
5) Reimbursement of the LC

Governing rules over export letters of credits :

Duties and responsibilities of the parties of documentary letters of credit are subject to the International Commercial terms ( INCOTERMS) and Uniforms Customs and Practice for documentary letters of credit ( UCP) unless otherwise is stipulated in the LC .
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