Products for Importers

An instrument issued by Citibank^® in favor of a beneficiary (exporter) and on behalf of the applicant (importer). Citibank commits to the payment of the transaction, provided that the exporter complies with the terms stipulated in the Letter of Credit.

• The importer is assured that payment will only be made only if the exporter complies with the terms and specifications stated in the L/C (quantity, statements, documents, terms, etc).
• Is particularly useful in those cases in which both importer and exporter do not know each other well, or it is a new relationship.
• The importer can improve his negotiating power by having Citibank commit to the payment.
• In many cases is required by the exporter in order to eliminate sovereign risk of the importer's country through confirmation.

• Because Citibank is committing to the payment of the Letter of Credit, the importer must maintain a credit line with Citibank.
• Banks never commit for the state of the merchandise covered by the Letter of Credit; only documents are verified to comply with the specifications.

• Issuing fees and amendments of amount and/or term. As the exposure for the bank is directly related to amount and term, the quotation is for the total amount of the L/C and for the whole term (credit validity + deferred term, if applicable). It is usually a percentage per annum.
• The confirmation fee is collected by a bank from the exporter’s country and is generally a percentage of the total amount of the L/C.
• Other costs: discrepancies, amendments, telex, mail, etc.

This is an instrument used to direct financial and commercial documents between the exporter and the importer. Citibank receives the collection (remittance letter and documents) from the exporter's bank and delivers the documents to its client against the acceptance of drafts and/or against payment according to the instructions received. With this instrument there is no bank commitment for payment.

• The importer is sure that the export has taken place before paying or committing for payment (typically accepting drafts).
• Consequently, the exporter can be sure that the documents representing the ownership of the goods, will only be given to the importer against payment or acceptance.
• This product can be more flexible for the importer given that if he does not pay on the exact date of maturity, usually there are no actions taken (because it is a product based on confidence between the parties).
• Nevertheless, the exporter can ask for the protest of the draft to be sure of the eventual legal execution in case of non-payment. In a sight collection, the exporter retains the ownership of the goods until the importer pays.
• Since there is not a commitment from a bank, it is mainly used as an alternative for those cases in which the relationship between importer and exporter has become strong, reliable and they share a good credit and performance history.

• Neither the importer nor the exporter needs to have a credit line to operate with collections.
• It is an efficient vehicle for dealing with documents, keeping them safe and managing the payments, but note that banks do not review the documents and thus have no concern regarding their wording.

• Advising fee: a percentage of the total amount of the collection with a minimum expressed in US$.
• Other costs: protest, managing unpaid transactions, etc.

A guarantee of payment (different from a Documentary L/C, which is an instrument of payment) used to guarantee the performance / compliance of one of the parties to a commercial contract. Typically, Citibank is committed to pay to the beneficiary only if the commercial agreement covered by the Stand-By is not observed by the applicant. There are also operations in which the Stand-by Letter of Credit functions as a payment mechanism.

• It can be used to cover different types of contracts
• Can guarantee the exporter's performance in some transactions or only in one specific transaction (such as capital goods' import with technical specifications, projects on a turn-key basis, etc.)
• Could cover the compliance of the importer in open account for a number of transactions.
• Is usually required in international biddings.

• Issuing fee and amendments for term and/or amount: a percentage of the total amount for the total term; generally this fee is expressed on a per annum basis.
• Other costs: amendment, cable, etc.

Loan given to the importer to provide liquidity for buying with sight payment to the exporter. Each loan must be related to one specific import transaction and the term of the financing can vary depending on the type of products imported and the requirements of the importer.

• Obtain liquidity to pay for imports.
• The importer can receive better conditions for the purchase based on sight payment.
• Citibank can offer the structure, currency and terms that the business or transaction requires. Depending on the case, it is possible to create a "tailor made" structure.

• Is usually expressed as a spread over a base rate (LIBOR, PRIME).

Medium or long-term import financing for capital goods. The Export Credit Agencies are export-promoting agencies from the exporter's country (run by the government) that cover political and in some cases, also commercial risk, of the importer, allowing Citibank to offer financing under better conditions.

• The importer can get financing terms according to the nature of the goods purchased buying, with adequate costs.
• Citibank works with the main Export Credit Agencies around the world.
• In well-ranked companies, it is also possible to get commercial coverage (comprehensive: political & commercial risk), so the credit line with Citibank would not be used, except for the minimum part not covered by the Export Credit Agencies.

• Rate: usually based on LIBOR.
• Structuring fee: based on the deal to be arranged with the Export Credit Agencies.
• ECommitment fee: collected by the Export Credit Agencies on the amounts committed but not already disbursed.
• Exposure fee: collected by the Export Credit Agencies based on the sovereign risk they are assuming.