Trade Finance

Import Settlement

1. Issue an L/C

Bank of China issues a Letter of credit on importer's account to undertake to pay the foreign exporter the value of the goods provided the required documents are submitted and the terms of the credit are complied with;
By an L/C issued by BOC, you can improve your negotiation status –You are able to negotiate for a lower purchase price and better terms. In addition, an L/C will assist to ensure the goods supplied are the goods ordered and to keep the trade going more safely;

Advantages of Bank of China

BOC can issue different types of L/Cs as per client's requirement, such as: Sight Payment L/C, Deferred Payment L/C, Acceptance L/C, Negotiation L/C, Transferable L/C, Confirmed L/C, Revolving L/C, Back-to-Back L/C, etc;
BOC has a professional team proficient in international standard operations on letter of credit;
Good reputation of BOC makes its L/C issued widely acceptable by exporters in every country and can also help the applicant lift its credit rating.

2. Inward documentary collections

Upon reception of entrustment from the foreign correspondent bank, in accordance with instructions received, Bank of China collect payment from you and deliver the relevant commercial documents to you;
There are two types of inward collection. Under D/P terms, import documents are released to you against your payment. Under D/A terms, documents are released to you against your acceptance.
Low Cost—helping you to save expense and control cost.
Convenient and Simple —easy to operate, convenient and feasible as compared with letter of credit.
Little capital occupied—no prepayment is required at the preparation and shipping stage of the exporter so that no capital is occupied, you can obtain the documents and dispose the goods by payment or acceptance.
Improve cash flows—under D/A terms, you can obtain the commercial documents and dispose the goods by acceptance of the bill, and the payment can be made after the goods are sold out and cash inflow realized. There is almost no capital occupation, so that liquidity is improved.
D/P is recommendable when the importer has sufficient work capital;
D/A is recommendable when the importer does not have sufficient working capital, but shares good cooperative relation with the exporter and requires financial facility granted by the exporter.

3. Outward remittance

The instruments of remittance includes telegraphic transfer(TT), mail transfer(MT), and draft transfer(DD), among which telegraphic transfer and draft transfer are used most commonly;
Compared with the letter of credit and collection, the remittance has the characteristics of simple formality and lower charge;
Telegraphic transfer is the most quickly. As you can make the payment in time, you may establish excellent reputation and win the trust of the exporter;
By adopting the outward remittance operation under the item of paying upon delivery of goods, you can avoid trade risks such as no goods received after payment, goods shortage, and non-standardized goods quality, etc.
The expense of draft transfer is relatively lower. The remitter who care for cost rather than the speed of payment can use this instrument;
It is recommendable to select outward remittance for payment of materials expenses, the technical expenses, and the trade incidental expenses (including the freight and insurance) etc.;
It is applicable to use outward remittance for payment of the residue under the trade item.

Advantages of Bank of China