SAFETY AND FLEXIBILITY
IN INTERNATIONAL TRADE TRANSACTIONS
Get to know BNI Europa’s Trade Finance solutions
designed to support your cross-border businesses.
Documentary Credit or Letter of Credit is an agreement whereby BNI Europa assumes the payment of an international transaction carried out by the Customer, on the latter’s request and according to the contracted terms and conditions.
Besides guarantee payment to export companies that are its Customers, BNI Europa ensures that the payments to be made by its Customers that are import companies are only made after confirmation of the agreed conditions.
There are different types and ways of Documentary Credit available, such as the Transferable or Renewable Credit and Notified Credit or Confirmed Credit, and different ways of payment to the beneficiary: in Cash, Term, Mixed or Negotiable.
The issue of a Documentary Credit or Letter of Credit by BNI Europa is subject to obtaining collateral based on an analysis of the operation.
It ensures exporters that payment of the goods is received within the stipulated conditions and deadlines, regardless of the import company’s financial availability. It also gives them access to credit through a discount on the Documentary Credit.
For importers, it ensure that payment is made on presentation of the stipulated documents and once all the conditions contracted in the Letter of Credit have been met. It also relinquishes them from paying in advance or immediately.
On request by the Issuing Bank, normally foreign, BNI Europa notifies or confirms the open Credit on the order of an importer (originator) in favor of its Customer (beneficiary exporter). Once the documentation has been verified and confirmed, BNI Europa receives the payment according to the previously established conditions. The amount is transferred by BNI Europa to its exporter Customer’s account.
On the instructions of an importer Customer (originator), BNI Europa (issuer) issues a Letter of Credit, pledging to pay the exporter (beneficiary) the value of a commercial transaction. Once the documentation has been verified and confirmed by the Notifying Bank (Bank that mediates the relationship with the exporter), payment is made according to the previously established conditions. The amount is transferred from the Notifying Bank to the exporter.
Documentary Remittances are a solution designed to support transactions between importers and exporters who have already established a relationship of trust, and bring greater fluidity and security to foreign trade operations.
Through these, BNI Europa allows you to pay for goods and services, exported or imported, and the documents relating to the transaction being sent or received by BNI Europa, which ensures that the previously established collection or payment terms are met.
They guarantee that exporters receive payment of exported merchandise or obtain an enforcement order. It allows importers to defer payment until the moment the merchandise is ready to be delivered.
After an exporting company has dispatched the merchandise that it sold to a customer in another country, BNI Europa sends to the Correspondent Bank in the destination country the documentation regarding the transaction. The Bank of the importing country receives the documentation and delivers it to the importer, according to the defined collection instructions: payment, acceptance or mixed. The importer can then collect the acquired merchandise.
BNI Europa receives from a foreign Correspondent Bank the documentation regarding a transaction whose merchandise is intended to his Customer – an importer in Portugal. According to the exporter’s instructions – upon payment, acceptance or partial payment and acceptance of the remainder – BNI Europa delivers the documentation to its Customer. Only than the Customer collects the acquired merchandise.
Especially relevant when establishing new international commercial relations, Bank Guarantees ensure that the obligations and payments between the interfaces who were unknown to each other before, are achieved.
Through the issuance of International Bank Guarantees, BNI Europa guarantees the obligations that a client company took third parties but cannot comply with, being responsible for the respective fulfillment, within the previously established time and conditions.
International Bank Guarantees can be made without and with a First Demand Clause, making it possible, in the second case, to invoke exceptions that invalidate the obligation to make payment. They may also vary with regard to the term, with the option for Guarantees Without Term, With a Fixed Term, Automatic Expiry and Automatic Renewal.
They ensure that obligations and payments assumed by interfaces doing business for the first time, are met, responding to the requirements of importers or foreign suppliers.
As such, they assure the reputation between commercial interfaces, who do not know the capacity or integrity of a company with which they are starting to do business, and is an alternative to collateral demanded by certain contracts, and avoids moving funds.
After the business Customer requests BNI Europa to issue a Bank Guarantee, it is issued, and the Bank takes on the responsibility for honoring the commitment. Should the Customer not fulfill its obligation, BNI Europa takes on the commitment and makes the payment to the beneficiary.