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Home	Service for Corporate Clients Documentary Transaction

Documentary Letters of Credit

Print version

A documentary Letter of Credit (L/C) is the obligation of the bank, which has issued the (L/C) on the instructions of a buyer (an applicant or importer), to pay in favour of a seller (beneficiary or exporter) a given sum in an agreed currency providing that the seller forwards documents called for in the L/C and confirming the shipment of goods (provision of services) within the determined period of time.

L/Cs in foreign-trade transactions are used in the following circumstances:

The absence of any reliable information on the reputation of counterparty. As a rule, an L/C is used when the seller and buyer do not know each other, and alternative methods of payment, such as advance payment or collection, do not satisfy either party.

An aspiration to obtain additional guarantees owing to participation in clearing transactions of a third party such as a bank. The seller is guaranteed that he will obtain funds only if he produces duly executed documents defined in the L/C and confirming shipment of the commodity by the time agreed. On the other part, the buyer is guaranteed that the payment will not be made if the documents produced by the seller do not meet requirements of the L/C.

Operation

Rates

Remarks

export documentary credits:

Pre-advising a documentary credit

USD 50

Advising a documentary credit *

0.1%,
min — USD 40,
max — USD 500

Confirmation of a documentary credit:

— on uncovered basis

5% per annum or by arrangement

— on covered basis

0.2% per quarter or part thereof,
min — USD 50,
max — USD 1,000

Taking up of documents **

0.3%,
min — USD 50,
max — USD 1,000

for each set of documents

Payment commission

0.2%,
min — USD 20,
max — USD 500

Amendment of documentary credit terms

USD 40

for each amendment

Discrepancy fee

USD 30

Cancellation of a documentary credit

USD 40

Taking up of documents if Raiffeisen Bank Aval isn't nominated as available bank

0.1%,
min — USD 40,
max — USD 250

Deferred payments commission

0.1%,
max — USD 50

Transfer of a transferable documentary credit

0.25%,
min — USD 50,
max — USD 1,000

Negotiation of documents

by arrangement

import documentary credits:

Pre-advising a documentary credit

USD 50

Issuing a documentary credit/increasing a documentary credit amount

0.3%

Depending on the amount:

Up to 400,000;

400,000 to 800,000;

800,000 to 1,500,000;

above 1,500,000

min — USD 100

max — USD 1,000

max — USD 2,000

max — USD 3,000

max — USD 4,000

Providing a documentary credit with another bank confirmation with clean line utilisation

Per each individual L/C agreement

Other amendments of documentary credit terms

USD 40

Taking up of documents *

0.3%,
min — USD 50,
max — USD 1,000

For each package of documents

Discrepancy fee

USD 30

Cancellation of a documentary credit **

USD 40

Payment commission

0.2%,
min — USD 20,
max — USD 50

Acceptance of drafts

Per agreement

other operations under documentary credits:

Additional request on customer demand

USD 20

Issuing a STAND-BY

— on uncovered basis

by arrangement

— on covered basis

0.25% per quarter or part thereof

Acting as a reimbursing bank

0.15%,
min — USD 30,
max — USD 500

* Raiffeisen Bank Aval reserves the right to charge an additional fee of USD 100 if the L/C foresees the provision of complicated, or a large number of documents (more than 7).

** Commission may be increased for the amount of the relative commission of regional branch

Should the L/C be cancelled or its validity period or part thereof expire, fees are not reimbursed.

Head Office:

9, Leskova Street, Kyiv, Ukraine, 01011
Call Centre:
Tel: 8 (800) 500-5000 (free of charge in Ukraine)
(044) 490-88-88 (24 hour service)
E-mail: info@aval.ua
E-mail: sme-info@aval.ua