GENERAL GUIDELINES FOR ESTABLISHING AN IRREVOCABLE LETTER OF CREDIT/ DOCUMENTARY CREDIT (SIGHT & USANCE)
- All the clauses within the L/C must be clear, concise and acceptable.
No special clauses, terms and conditions allowed.
- L/C to be confirmed by a local or foreign bank in Singapore unless LC is issued from an International Bank.
- L/C should be irrevocable, unrestricted and made available with any bank in Singapore by negotiation, unless it is confirmed.
- L/C must be for value more than USD50,000.00
- L/C must state that all charges inside or outside Singapore, including advising commission, negotiation commission, reimbursement charges, discrepancy charges, discount charges and interest, are for Applicant’s account.
- L/C must allow 21 days (minimum) from the shipment date for presentation of documents for negotiation
- Do not call for documents other than Commercial Invoices, Packing Lists and Transport Documents (Bills of Lading/Airway Bills/House Airway Bills/Delivery Orders) in the L/C.
- Do not call for any of the following documents in the L/C:
- Beneficiary Certificate certifying that shipment details have been advised by telex or fax to Issuing Bank/ Applicant/ Insurance Company after shipment is effected
- Certificate of Origin from Chambers of Commerce
- Pre-shipment Certificate
- Manufacture’s Warranty / Guarantee / Quality Certificate
- Airlines or Carrier’s Agent Certificate
- Do not include delivery/shipping schedules, detailed product description/ part numbers in the L/C.
- L/C should allow partial shipment and transshipment but shipment & billing should be arranged for complete order in one single invoice. This arrangement is to cut down on LC bank charges as there is a minimum charge for every partial LC submission.
- L/C should allow shipment from Singapore.
For Usance LC Only
- For Usance L/C, prevailing Prime rate + 1.5% (not LIBOR or SIBOR or cost of funds) must be charged to Applicant from the time the draft is discounted till the final settlement of the bill. L/C must allow separate draft for the interest amount which must be payable over and above the L/C value.
- Maximum tenor for Usance L/C is 30 days from the date of the Transport Documents. (Any tenor higher than 30 days will require specific approval)
Important Notes
- Orders will not be released before the original L/C is received and vetted.
- Orders will not be released and hence documents will not be processed if the L/C contains discrepancies that requires amendments. i.e. Expired L/C or Shipment date, unacceptable clauses or others deemed as discrepancies.
- Any deviation from the above requires specific approval.
- For orders via LC payment, avoid partial delivery/billing as there is a minimum L/C bank charges for each document submission.
Note:
To avoid unnecessary LC amendment charges & shipment delay, draft LC must be forwarded to Ingram for vetting & acceptance.
For any LC queries, kindly contact Ms Lee Kim Kee at +65 6590-1664 or email her at