The use of Letters of Credit has increased significantly by UK exporters and importers because of the global economic situation, political insecurity in some markets and the withdrawal of credit insurance cover.

The UK Government has now introduced The Letter of Credit Guarantee Scheme. The intention is to stimulate exports to emerging markets by sharing the credit risk associated with Letters of Credit from these markets. This should contribute to a further increase in usage.

The major international banks report that between 60% and 70% of documentary submissions by exporters are rejected on first presentation because of non compliance with the conditions of the credit.

We believe that the main causes of rejection are a lack of understanding of the underlying principles of a documentary letter of credit and a failure to construct a workable credit that directly relates to the sales or purchasing contract. These failures can lead to increased costs for all parties, loss of goodwill, delayed payment and possible default.

To use Letters of Credit effectively importers and exporters will need to fully understand the dynamics and terminology of a letter of credit, the role of each party, the importance of the shipping documents and the level of security offered.

This seminar will therefore examine LC process in detail and offer guidance on how to create a workable credit. It will consider the different interests of the exporter, importer and the banks and methods of reducing the risks for all parties.