Transferable Letter of credit in Hong Kong

The processing for Transfer Letter of credit is at least involving 6 parties.

There are Buyer, Buyer’s Bank (it’s also referring to Issuing Bank), Seller; Seller’s bank (it’s also referring to 1 Advising Bank); supplier and supplier’s bank (it’s also referring to 2 Advising Bank), Let see the flow of the procedure.

Issuing Bank will send the Letter of Credit cable to the seller which was through first advising bank. then Seller will arrange the transfer Letter of credit application to 1 advising bank. Once the supplier received the transfer Letter of credit cable through second advising bank.

The supplier will arrange ship the goods to Buyer then will submit original document to second advising bank. The second advising bank will send the documents to the 1advising bank. After that seller received the supplier documents from 1 advising bank then they need to prepare the substitute documents and submit them to 1 advising bank as well. 1 advising bank will replace the documents and send them to Issuing bank. Finally Issuing Bank will check all documents and honor or refuse.

What can be changed when transferring a Letter of Credit?

– The Letter or credit amount and Unit prices may be reduced.

– The expiry date, latest shipping dates, and period of presentation date may be curtailed.

– The name of the beneficiary is substituted for the name of the applicant (buyer), but if the applicant’s name is required to be stated in any document other than the invoice, this requirement must be adhered to.

– If an insurance document is required, the coverage may be increased to provide coverage as required by the original Letter of credit.

Following is the average cost of Bank Charge, you can take it as a reference. We also welcome for you to leave a message to us if you would like to know the specific Bank charges. Below are excluding the bank charges outside of Hong Kong.