Products for Exporters

The importer's bank irrevocably commits for payment provided that the exporter complies with the terms and specifications of the Letter of Credit. Citibank^® notifies, negotiates documents and pays to the exporter. If required, can also confirm the Letter of Credit (becoming also an obligor).

• The exporter has a bank commitment to pay, instead of running the importer's commercial risk.
• If Citibank gives its confirmation, the exporter eliminates sovereign risk from the importer's country and commercial risk from the issuing bank.
• Is particularly effective when there is not enough credit history between importer and exporter and the exporter does not want to assume the political risk of the importer's country.
• Citibank has one of the biggest network of branches and correspondent banks around the world by which it is prepared to provide its confirmation.

• The exporter's credit line is not affected when using Letter of Credits.
• The main concern, as an exporter, should be that the documents presented are exactly within the terms required in the Letter of Credit. This ensures there will be no delay in the reimbursement of funds due to discrepancies/problems.
• When receiving deferred payment Letters of Credit issued or confirmed by well-ranked banks, exporters can secure better terms of financing.

• Advising fee: generally a fixed amount.
• Confirming fee: percentage on the total amount of the L/C, usually per quarter.
• Negotiating fee: flat percentage on the amount of each negotiation.
• Other costs: discrepancies, amendments, telex, mail, etc.

The exporter asks Citibank to remit the title documents and the collecting instructions to the importer's bank. Citibank makes any necessary tracer as representative of its customer and at maturity, collects and pays the funds to the exporter. There is no obligation, for the bank, to pay to the exporter until funds are received.

• The exporter is sure that documents will not be given to the importer unless he pays or commits to pay.
• In term collections, the exporter has a legally executable document (draft or promissory note).
• In sight collections, the exporter retains the ownership of the merchandise until it is paid.
• Citibank provides its structure and efficiency in handling commercial and financial documents and acts as representative of the exporter for dealing with remittance of documents and their collection.
• When there is a reliable credit and performance history between importer and exporter, this may be a relatively secure, less expensive alternative.

Even when Citibank can make a claim for delayed payments (and you will be informed of all tracers done and their results), it will not perform any legal action unless "protest" is requested in the remittance letter. This legal action will only be initiated at exporter’s request and on his behalf.

• Usually a percentage on the total amount of the collection with a minimum expressed in US$.
• Other costs: Protest, special handling of unpaid transactions, etc. Please consult your Trade Specialist.

A documentary collection in which documents are sent directly to the importer's bank by the exporter. The documents are accompanied by a form with collecting instructions provided by Citibank (cover letter). A copy of the form is sent to Citibank for tracking and collections processes the same as in traditional collections.

• Time is saved since documents do not have to be sent to one bank which in turn sends it to the importer's bank.
• Collections possess the same power as if they had been remitted directly by Citibank since the cover letter appears to have been sent by Citibank with its own reference number.
• The tracking and collection are exactly that of traditional collections.

• The exporter assumes responsibility for the use of Citibank's numbered forms, since these will be received by the banks as coming directly from Citibank.

• Usually a percentage on the total amount of the collection with a minimum expressed in US$.
• Others costs: Protest, special handling of unpaid transactions, etc. Please consult your Trade Specialist.

• Pre-export financing: loan given by Citibank to the exporter to provide liquidity for buying or processing goods to be exported.
• Post-export financing: loan provided to allow the exporter to give better financing terms to his buyers.
• The terms and conditions can vary, depending on the nature of the transaction and product.

• Provide the exporter with enough liquidity to buy, prepare and/or produce the goods to be exported.
• Improve the exporters' capability for financing his buyers. This may become a important marketing tool for the exporter's products.

• Spread over a base rate (LIBOR, PRIME) or a fixed rate.

Discount of Letter of Credits, drafts or export commercial documents, affecting the credit line of the exporter. In this case, Citibank advances funds to its customer, but in case the importer does not honor the payment, the exporter has to cancel the transaction at maturity.

• The exporter can give financing terms to customers without an impact on cash flow.
• The exporter obtains funds in advance without affecting their credit line. This type of financing can also be obtained by non-credit customer.
• The exporter minimizes sovereign and commercial risk from the importer and from the issuing/accepting bank.
• In some cases, Citibank can discount on a non-recourse basis the drafts accepted by an importer and assure his risk, when this importer is a customer of the bank.

• Spread over a base rate or fixed rate for the term remaining until the maturity of the L/C of draft(s)