Letters of Credit (LCs)

Expand the geography of your import or export operations while mitigating the risks of delivery failure or delinquent payment.

Letters of Credit (LCs)

Expand the geography of your import or export operations while mitigating the risks of delivery failure or delinquent payment.

To learn more

Are you planning to expand into new markets? To expand the geography of your import or export operations? To start doing business with new buyers or suppliers from other countries?

Take advantage of a LC: form of cashless settlements constituting irrevocable obligation of the bank to execute payment against documents, indicated in the LC, evidencing fulfillment by one party (as a rule, LC's Beneficiary) towards the other party (as a rule, LC's Applicant) of the obligations on shipment (delivery) of goods, execution of works, or rendering of services.
The presented documents must comply with the LCs terms, LCs Rules and international standard banking practice.

LCs Advantages

  • Risk Mitigation

    Risk Mitigation

    As the bank pays only against the documents, stipulated by the LC, an importer mitigates risks of failure to deliver goods (execute works, render services) or their improper quality or quantity. An exporter replaces the risk of the importer's delinquent payment with the bank's risk and benefits from the opportunity to receive payment for the goods immediately after shipment.

  • Independence, dealing with documents

    Independence, dealing with documents

    LC is a separate transaction from the sale or other contract, stipulating LC as a form of settlements. The bank deals with documents, and not with goods (performance, services) to which the documents may relate. The bank makes a decision to pay under LC based on the presented documents and LC terms.

  • Business expansion

    Business expansion

    An opportunity to expand the geography of your import or export using LC with the participation of the bank of either the importer or exporter country, or other banks, including international, acceptable for both the importer and the exporter.

  • Financing

    Financing

    Within the LC the importer or exporter financing is possible with the purpose to observe the balance of interests in trade transactions (the exporter immediately receives cash for the shipped (delivered) goods, executed words, rendered services, the importer – under deferred payment).

  • International rules

    International rules

    LCs (including standby LCs) are regulated by the Uniform Customs and Practice for Documentary Credits, published by International Chamber of Commerce (ICC) in 2007 (hereinafter referred to UCP600) being mandatory and binding for all LC parties. UCP600 is a set of rules on the issuance and use of letters of credit.
    The banks are also guided by the International Standard Banking Practice for the Examination of Documents under UCP600 (ISBP), ICC Publication no. 745 (the most recent one being the 2013 revision), and other documents issued by ICC.
    International Standby Practices (ISP98), ICC Publication No. 590 in 1998, can be applied to standby LCs.
    Working within the aforementioned rules contributes to harmonious cooperation among all LC parties ensuring unificated interpretation of LC principles and procedures.

LC for Importers

  • Avoid advance payment

    Avoid advance payment

    Advance payment is the most risky form of settlement.

  • Mitigate risks associated with the exporter's failure to fulfil their contractual obligations

    Mitigate risks associated with the exporter's failure to fulfil their contractual obligations

    The payment under LC will be effected after the exporter's documentary confirmation of the fulfillment of their contractual obligations.

  • Cut costs

    Cut costs

    The LC is cheaper than traditional lending.

The list of fees and commissions applicable to LCs for importers1,6

Operation

Fee/Commission for LCs in BYN

Fee/Commission for LCs in the foreign currency2,3

1. Issuance and administration of a LC:4    
1.1 LC with the provision of cash equal to the LC amount and more prior to the LC issuance

0,03% from the LC amount per month, minimum 125 BYN per month

0,03% from the LC amount per month, minimum 50 EUR per month

1.2 LC without the provision of cash equal to the LC amount prior to the LC issuance (or with a partial provision of funds):5    
1.2.1 - up to USD 15,000 (inclusive), 12,000 EUR, 450,000 RUR, (other currency – in USD equivalent at the exchange rate of NBB as at LC issuance date)

0,05% from the LC amount per month, minimum 250 BYN per month

0,05% from the LC amount per month, minimum 100 EUR per month

1.2.2 - exceeding USD 15,000 12,000 EUR, 450,000 RUR, (other currency – in USD equivalent at the exchange rate of NBB as at LC issuance date)

0,05% from the LC amount per month, minimum 125 BYN per month

0,05% from the LC amount per month, minimum 50 EUR per month

2 Fee/Commission for the LC amount unsecured by the Client's cash

as agreed by the parties

as agreed by the parties

3 Amendment to LC terms and conditions

125 BYN

50 EUR

4 Acceptance, examination of  documents under LC

0,15% from the documents amount, minimum 125 BYN, maximum 1250 BYN

0,15% from the documents amount, minimum 50 EUR, maximum 500 EUR

5 Payment under the LC – for each presentation of documents    
5.1 under the LC (excluding standby LCs)

0,15% from the payment amount, minimum 30 BYN, maximum 375 BYN

0,15% from the payment amount, minimum 12 EUR, maximum 150 EUR

5.2 under standby LC

0,2% from the payment amount, minimum 125 BYN, maximum 1250 BYN

0,2% from the payment amount, minimum 50 EUR, maximum 500 EUR

6 Payment under the LC (excluding standby LCs) upon the Client's request earlier than the established date(additionally collected to the Clause 5) – for each presentation of documents

75 BYN

30 EUR

7 Acceptance of documents with discrepancies – for each presentation of documents

125 BYN

50 EUR

8 Early cancellation or reduction of the LC under the Client's request (full or partial) or pursuant to the LC terms and conditions

125 BYN

50 EUR

9 Tele-transmission message fee

12 BYN

5 EUR

10 Message transfer under LC

75 BYN

30 EUR

10.1 to the Client at the request of another bank
10.2 to another bank at the request of the Client

1. Fees and commissions under Priorbank JSC LC shall be payable within the periods stipulated by the agreement.

2. The Fee/Commission can be paid in the LC currency or in other currency (pursuant to the foreign currency legislation) at the exchange rate set by Priorbank JSC for currency exchange operations with the Clients at the payment date, if otherwise is not stipulated by the agreement.

3. If the transaction currency does not correspond with the currency of minimum (maximum) upon calculation of fees/commissions payable by the Applicant, the exchange rate of the National Bank of the Republic of Belarus is applied as at the date:
- of accrual (last business day of the month) if the obligation exists, and as at the last day of the obligation, if the obligation terminated;
- of service rendering – for commissions without taking into account the number of days.

4. The minimum is calculated based on the number of days of the validity of the obligation under the LC.

5. Upon cash provision the commission is not reviewed.

6. The cost of third parties services (post, courier service, etc.) involved in the aforementioned operations are not included in fees/commissions and shall be additionally paid by the Client upon the Bank's request.

1. Fees and commissions under Priorbank JSC LC shall be payable within the periods stipulated by the agreement.
2. The Fee/Commission can be paid in the LC currency or in other currency (pursuant to the foreign currency legislation) at the exchange rate set by Priorbank JSC for currency exchange operations with the Clients at the payment date, if otherwise is not stipulated by the agreement.
3. If the transaction currency does not correspond with the currency of minimum (maximum) upon calculation of fees/commissions payable by the Applicant, the exchange rate of the National Bank of the Republic of Belarus is applied as at the date:
- of accrual (last business day of the month) if the obligation exists, and as at the last day of the obligation, if the obligation terminated;
- of service rendering – for commissions without taking into account the number of days.
4. The minimum is calculated based on the number of days of the validity of the obligation under the LC.
5. Upon cash provision the commission is not reviewed.
6. The cost of third parties services (post, courier service, etc.) involved in the aforementioned operations are not included in fees/commissions and shall be additionally paid by the Client upon the Bank's request.

Our Services

LC for exporter

  • Guaranteed payment for goods (works, services)

    Guaranteed payment for goods (works, services)

    As the LC constitutes the bank's financial obligation, separate from the sale contract, the LC settlement form significantly mitigates the risk of delinquent payment for exported goods (works, services) assisting the exporters to expand to new markets.
    If the exporter cannot accept the risk of the LC Issuing Bank or the country of its origin, the LC can be confirmed by Priorbank.

  • Receiving of export revenues after the goods have been shipped (works have been executed, services have been rendered)

    Receiving of export revenues after the goods have been shipped (works have been executed, services have been rendered)

    LC settlement enables to receive export revenues immediately after the goods have been shipped (works have been executed, services have been rendered) upon documentary confirmation of the goods shipment (works execution, services rendering) for the importer. This increases the exporter's finances management efficiency and contributes to the development of trusting relationships with the importer.

  • Control and Timely Payments

    Control and Timely Payments

    Payments under the LCs are executed according to the periods, stipulated by the LC terms and conditions. After the documents are submitted, the banks control have over the timely payments under the LC, which improves the quality of export revenues inflow and distribution planning.

The list of fees and commissions applicable to LCs for exporters1,4

Operation

Fee/Commission for LCs in BYN

Fee/Commission for LCs in the foreign currency2,3

1

Acceptance, examination of documents under LC

0,15% from the amount of documents, minimum 125 BYN, maximum 1250 BYN

0,15% from the amount of documents, minimum 50 EUR, maximum 500 EUR

2

Acceptance, sending of documents under LC without examination

125 BYN

50 EUR

3

Payment under the LC – for each presentation of documents

   
3.1

under the LC (excluding standby LCs)

0,15% from the payment amount, minimum 30 BYN, maximum 375 BYN

0,15% from the payment amount, minimum 12 EUR, maximum 150 EUR

3.2

under the standby LC

0,2% from the payment amount, minimum 125 BYN, maximum 1250 BYN

0,2% from the payment amount, minimum 50 EUR, maximum 500 EUR

4

Acceptance of the documents with discrepancies – for each presentation of documents

125 BYN

50 EUR

5

Advising or confirmation of the LC authenticity

0,15% from the LC amount, minimum 125 BYN, maximum 625 BYN

0,15% from the LC amount, minimum 50 EUR, maximum 250 EUR

6

Advising or confirmation of the authenticity of the amendment to the LC

125 BYN

50 EUR

7

Preliminary advice

75 BYN

30 EUR

8

Transfer of the LC in favor of another beneficiary

0,3% from the amount, minimum 125 BYN

0,3% from the amount, minimum 50 EUR

9

Reimbursement claim

75 BYN

30 EUR

10

Tele-transmission message fee

12 BYN

5 EUR

11

Message transfer under LC

75 BYN

30 EUR

11.1

- to the Client at the request of another bank

11.2

- to another bank at the request of the Client

12

LC confirmation5

as agreed by the parties

as agreed by the parties

13

For deferred payment under the LC5 (when the obligation of the deferred payment is discounted)

as agreed by the parties

as agreed by the parties

1. Fees and commissions under other banks' LCs shall be payable until the 10th day of the month, following the month of the respective service rendering.

2. The Fee/Commission can be paid in the LC currency or in other currency (pursuant to the foreign currency legislation) at the exchange rate set by Priorbank JSC for currency exchange operations with the Clients at the payment date, if otherwise is not stipulated by the agreement.

3. If the transaction currency does not correspond with the currency of minimum (maximum) upon calculation of fees/commissions payable by the Applicant, the exchange rate of the National Bank of the Republic of Belarus is applied as at the date:
- of accrual (last business day of the month) if the obligation exists, and as at the last day of the obligation, if the obligation terminated;
- of service rendering – for commissions without taking into account the number of days.

4. The cost of third parties services (post, courier service, etc.) involved in the aforementioned operations are not included in fees/commissions and shall be additionally paid by the Client upon the Bank's request.

5. The commission is set in the form of the annual interest rate with application or without application of minimum quarterly fee (if the minimum rate is set, the number of days of the obligation validity in the month is not accounted) or flat.
Accrual period – quarterly (as a calculation base the calendar quarter is applied).
Advance payment (payable not later than on the day, following the day of the LC confirmation) or by quarterly installments not later than on the 10th day of the month, following the last month of the calendar quarter.
The fee/commission shall be paid in the LC currency.

1. Fees and commissions under other banks' LCs shall be payable until the 10th day of the month, following the month of the respective service rendering.
2. The Fee/Commission can be paid in the LC currency or in other currency (pursuant to the foreign currency legislation) at the exchange rate set by Priorbank JSC for currency exchange operations with the Clients at the payment date, if otherwise is not stipulated by the agreement.
3. If the transaction currency does not correspond with the currency of minimum (maximum) upon calculation of fees/commissions payable by the Applicant, the exchange rate of the National Bank of the Republic of Belarus is applied as at the date:
- of accrual (last business day of the month) if the obligation exists, and as at the last day of the obligation, if the obligation terminated;
- of service rendering – for commissions without taking into account the number of days.
4. The cost of third parties services (post, courier service, etc.) involved in the aforementioned operations are not included in fees/commissions and shall be additionally paid by the Client upon the Bank's request.
5. The commission is set in the form of the annual interest rate with application or without application of minimum quarterly fee (if the minimum rate is set, the number of days of the obligation validity in the month is not accounted) or flat.
Accrual period – quarterly (as a calculation base the calendar quarter is applied).
Advance payment (payable not later than on the day, following the day of the LC confirmation) or by quarterly installments not later than on the 10th day of the month, following the last month of the calendar quarter.
The fee/commission shall be paid in the LC currency.