Zahoor Dattu is a Senior Trade Services Specialist at Wells Fargo Bank NA, USA. The views expressed are those of the author and do not represent the views of Wells Fargo Bank.
When issuing banks insert complex reimbursement terms and self-serving conditions into their credits, it distorts the purpose of the product, causes problems for confirming banks, and drives exporters away from using LCs.
The silent confirmation market is still active and prevalent for LCs in Asian countries as silent confirmation is one of the means for a beneficiary to mitigate issuing bank and country risk when it does not want other banks to confirm its credit.
Following release of a US Government joint advisory document, “Guidance to Address Illicit Shipping and Sanctions Evasion Practices”, one prominent trade finance specialist reviews its key elements and collects feedback from fellow bankers on what it means for practice.
