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Letters of credit with post-financing option

The Letter of Credit is an irrevocable obligation of the Bank that opened a Letter of Credit on behalf of a Client (Payer) and in accordance with its instructions, to make a payment in the event that the Beneficiary of the funds or a person specified by it submits the documents and fulfills other conditions stipulated in the Letter of Credit.

Post financing is the financing provided by a foreign bank (the Confirming Bank) within the framework of an opened and confirmed Letter of Credit. Financing shall be made by mean of payment by the Confirming Bank at its own expense, for the documents submitted to the Confirming Bank by the Beneficiary or a person specified by it according to the terms of the Letter of Credit. For this financing, the Confirming Bank will charge a fee (commission) from the Bank.

The Letter of Credit with deferred payment is a Letter of Credit, under which the Beneficiary shall receive payment not when the documents are submitted, but later, within the time limits stipulated in the Letter of Credit. The Authorized Bank shall make payment on the date when the respective payment is due.

Main conditions for opening of a Letter of Credit with post-financing option:

  • Copy of import contract registered in accordance with the established procedure, which provides for a Letter of Credit with mandatory indication of the list of documents against which payment under the Letter of Credit shall be made (disclosure of the Letter of Credit), terms under the Letter of Credit, term of the delay, if the Letter of Credit provides for deferred payment and other data necessary for opening and disclosing a Letter of Credit;
  • Service fee for the Letter of Credit depends on the financial condition of the potential client and the type of security;
  • One-time commission - management fee of 0.5% of the amount of the Letter of Credit;
  • Currency of the Letter of Credit - US dollars/Euro;
  • Security under the Letter of Credit - cash in the national currency on the block account, as well as additional security.

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