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Export - Letter of Credit (L/C) - Dashen Bank

Export – Letter of Credit (L/C)

It is a written undertaking by issuing bank (from a foreign bank) to be issued, at the request of an applicant (customer of the foreign bank), who is buyer or importer), in favour of a beneficiary – customer of Dashen Bank (who is seller/supplier/ exporter) to effect payment to the latter against presentation of shipping documents which comply to terms and conditions stipulated in the text of an L/C.

Documents required for Permit Approval

a) Duly signed contract by seller & buyer

b) Authenticated message of L/C opened.

c) Seller’s invoice

d) Export License Valid for the year

e) Tax registration certificate (TIN certificate)

f) Export permit application form duly filled, signed & stamped (as appropriate) by the customer.

g) If the export is Teff or Berbere an undertaking letter from the exporter that the goods will be unloaded as mentioned in the export permit (excluding Djibouti and The Sudan)

h) NBE issues delinquent list of exporters periodically. Customer’s name should not appear in the delinquent exporters list of NBE for the period. If the name appears, there should be subsequent list indicating the given customer has cleared all outstanding items at NBE.

Expectations from exporters on L/C basis

a) Exporter should know foreign counter part as detail as possible with regard to financial soundness, reliability, integrity, full address, etc.

b) Exporter should insist on opening of each L/C from a bank which has correspondent banking relationship with Dashen Bank. L/Cs more preferably should be confirmed by a/c maintaining correspondent bank.

c) Exporter should go through text of L/C opened in his favor and make sure that compliance can be met without doubt. Otherwise, amendments need to be requested from opener before as soon as L/C is received or at the latest long before shipment of consignments.

d) Sales/Purchase contract should exist between the two parties (importer and exporter).