Export L/C Transfer

Business Sector (‘LT’)

Introduction:

A Transferable Letter of Credit (LC) is a documentary credit under which the Beneficiary (first Beneficiary) may request the bank specifically authorised in the credit to transfer the credit, available in whole or part, to one or more secondary Beneficiary(ies).

The LC can be transferred only in accordance with the terms and conditions stipulated in the original LC, with the exception of the following which may be changed:

• the LC amount
• the unit price of goods (if stated in the original LC)
• the time of shipment
• the last date for presentation of negotiation documents
• the expiry date of LC

Any or all the above may be reduced in the transferred credit to the second Beneficiary. Moreover, the name of the Applicant can be substituted with the name of the first Beneficiary, unless the original LC stipulates that the name of the Applicant be used in any document other than the invoice. If all or part of the LC is transferred, the first Beneficiary retains the right to substitute their own drafts and invoices for those of the second Beneficiary if they so require. Instructions must also be provided on whether the bank is allowed to make any amendments to the original LC to the second Beneficiary.

In DOKA SaaS, the “Transfer L/C” business sector is a subordinated business sector of the “Export L/C” business sector. All transactions that need to process a transfer L/C and to handle documents are available in the “Transfer L/C” sector.

“Bills Received under a Transfer L/C” (BT’s) are the document sets under a transfer L/C. They are created in the “Documents Received under a Transfer L/C” (LTTDCK) or in the “Advising Documents” (LTTDAV) transaction. Each “Bills Received under a Transfer L/C” is technically subordinated to the Transfer L/C and the Export L/C which created it.

Transactions for further processing the document sets are available in the “Bills Received under a Transfer L/C” business sector.

Export L/C, Transfer L/C and Bills Received (Received Document Sets)

In the application the general transaction processing is done in the respective business sector - in this case under Transfer L/C (letter of transfer; abbreviated: LT) - and there under the selected contract. In Transfer L/Cs this is different, insofar as the Transfer L/Cs are opened with the transaction “Open a Transfer L/C” in the business sector “Export L/C”.

This Transfer L/C is stored under its own unique reference number and contains all data associated to the contract. All other transaction (e.g., modifications, etc.) are edited in business sector “Transfer L/C” under the relevant contract.

When documents are presented under the Transfer L/C, the received data are entered with the relevant transaction. The data are stored for each document set in a so-called subcontract. This subcontract has its own reference number (made up of the reference number of the Transfer L/C combined with a counter). This type of subcontracts is called “received document sets” in the application. The sub business sector is called 'Bills Received' (abbreviated: BT).

All transactions, that are associated to a document set are processed under the relevant subcontract.

The organization of this process makes sense because multiple single presentations of documents can take place in a letter of credit. This division of the work allows each individual presentation to be processed easily. The application calculates the total of all presentations against the original amount of the Transfer L/C.

Flowchart Business Sector Transferable Export L/C

System Outgoing Messages (Swift/Letter):