Documentary operations (letters of credit and bank guarantees)

JSC Belagroprombank offers a wide range of services on documentary operations, including:

•     Opening of import letters of credit;
•     Advising and confirmation of export letters of credit;
•     Issuing and advising of all kinds of bank guarantees;
•     Opening and advising of standby letters of credit.

When rendering documentary operations JSC Belagroprombank applies standard banking products in the field of documentary business and offers individual settlement schemes, as well as using foreign trade finance tools to provide all-inclusive services for foreign trade agreements for its customers. A letter of credit as a form of settlement is multifaceted and is capable of adjusting to the unique character of the structure of any foreign trade agreement.

At the customer’s request, we will open a letter of credit without requiring the customer to provide his own funds to secure the fulfillment of a letter of credit until the payment is made thereon. Coverage can also be arranged through the credit line provided to the customer by JSC Belagroprombank. JSC Belagroprombank provides loans on favourable terms and conditions funded with the money coming from credit facilities raised from foreign banks. Furthermore, a letter of credit serves as a basis for various payment deferment schemes for a customer with the possibility of arranging the successive discounting documents by the non-resident bank.

Depending on the peculiarities of each foreign trade transaction there are the following options of a letter of credit: confirmed, transferable, standby, revolving and other types.

Fast-developing cooperation with first-class European banks enables our Bank to consider confirmation of documentary letters of credit opened by the Bank on the instructions from clients.

When rendering methodological assistance to its clients, JSC Belagroprombank provides the following information:

•     Recommendations to clients regarding opening of import letters of credit ;
•     Sample of settlement terms in a foreign trade contract  (download);
•     Letter of credit application form (download).

The benefits of settlement through the letter of credit:

Benefits to the importer:

•     Payment for goods is made only after the actual and documentary confirmed shipment;
•     Guaranteed goods delivery in accordance with the stock list and due dates, as well as the possibility to control product quality;
•     The Bank shall not make a payment unless all documents presented under the letter of credit comply with its terms.

Benefits to the exporter:

•     Guaranteed proceeds from shipped goods regardless of the financial position of the customer;
•     The possibility to receive a loan from the local bank under the letter of credit opened in his favour to finance the production of respective goods or to purchase the necessary components.

At the moment standby letters are becoming increasingly popular as they guarantee that the beneficiary will receive money in case the ordering customer fails to fulfil his contractual obligations.

Benefits of using a standby letter of credit:

•     The possibility  of receiving goods without advance payment;
•     Guaranteed fulfillment of the obligations of the issuing bank towards the beneficiary;
•     The possibility of early termination of the standby letter of credit provided the obligations to the beneficiary have been fulfilled.

On the instructions from its clients, JSC Belagroprombank issues international bank guarantees, of which the most popular are the following:

•     Advance payment guarantee (guarantees the fulfillment of obligations to return advance payment to the buyer in case the supplier fails to fulfil its contractual obligations);
•     Performance guarantee (guarantees the fulfillment of contractual obligations to deliver goods, perform work, render services);
•     Tender guarantee (guarantees the fulfillment of the obligations of the tenderer to sign the contract for the supply of goods, performance of work, provision of services);
•     Guarantee of payment (secures the fulfillment of the obligation to make a payment in case the buyer fails to make a payment under the contract).

The bank guarantees secure proper fulfillment of all financial obligations of a customer’s counteragent, provide the option of deferment of payment under a foreign trade contract and do not require own circulating assets for the purpose of advance payment etc.

Further information is available in any branch office of JSC Belagroprombank.