Import Letters of Credit

As an importer, you can use Import Letters of Credit (Documentary Letters of Credit) to provide your suppliers with CIBC's undertaking that they will receive payment upon the delivery of the required documentation within a particular timeframe, as specified in the Letter of Credit. Using a Letter of Credit reduces the risk of having to pay for the goods in advance by requiring that the documents presented by the exporter are consistent with the pre-arranged terms of the Letter of Credit.

If the beneficiary of your Import Letter of Credit is not the actual supplier of the goods, a Transferable Letter of Credit may be more suitable for your business needs. Learn more about the benefits of a Transferable Letter of Credit.

For high volume importers, CommLinc™ or Trade Workstation™ can help organize your transactions.

Key benefits

1. Reduces your payment risks

• Enables you to potentially negotiate better prices with your suppliers, as payment to your suppliers is guaranteed by CIBC provided the terms of the Letter of Credit are complied with
• With a Letter of Credit as security for payment, your suppliers should not insist that shipments be secured by cash in advance

2. Improves your operational efficiency

• CIBC Trade Finance will issue the Import Letter of Credit, handle document checking and payment to the suppliers and track the transaction status of the Letter of Credit
• Through CommLinc LC™ and Trade Workstation™, qualified importers can initiate and receive information on Import Letters of Credit issued by CIBC via the Internet, which may:
• Increase the overall efficiency of communications with CIBC and your suppliers
• Facilitate communication directly with CIBC's processing centre to initiate the issuance of Letters of Credit, thus reducing processing time
• Help you find current Letter of Credit information (e.g., account activity and summary of outstanding letters of credit)
• Allow you to transfer Letter of Credit information to a number of reporting package options to create customized reports
• Our trade finance experts provide you with structuring, mitigation and financing expertise and up-to-date country and trade risk guidance to support and expedite your trade transactions

3. Gives you greater control over your trade activities

• Since Letters of Credit stipulate a latest shipment date and a latest period for presentation of shipping documents, importers are provided with more transaction certainty and security
• A Letter of Credit assists importers and exporters in facilitating international trade where open account terms are not practical or preferred, especially when you are doing business in a new country

Is it for you?

Import Letters of Credit may be for you if you:

• Engage in import transactions
• Want to minimize your risks in international trade
• Require greater control over shipping dates and receipt of documents for your imports

Please note:
The above is intended to be only a general description of these products and their features. Certain conditions, restrictions and exceptions may apply. CIBC reserves the right to change or discontinue these products or any of their features at any time. These products and their features shall be subject to the terms and conditions of the applicable agreement governing their use. For more information, please contact our Trade Finance team.

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