Relationship with the Exporter

Where DC terms are agreed in a sales contract, the DC can be advised through the exporter's local HSBC Group office.

The DC issuing bank will send the DC to either a branch or to a correspondent bank so that it can be authenticated.

Included in the DC will be an authorisation to a specifically nominated bank to negotiate, (unless negotiation is not restricted, in which case, any bank) to pay or accept, bills of exchange under the DC for correctly tendered documents.

The beneficiary should have a bank account in order to facilitate the transaction. For example, the beneficiary will need the convenience of receiving:

• Remittance of proceeds from drawings under the DC to his own bank.
• Advice and assistance on trade transaction procedures.
• Advice and assistance with foreign exchange activity.
• Prompt payment of the bill proceeds to improve the liquidity of his business.
• Country-risk information and reports on the ability of the opening bank to pay.

The beneficiary will be able to receive all the above services from any Group Office.

Very often the beneficiary’s bank will not be the same as the bank nominated to negotiate, pay or accept the Bill of Exchange.