Sellers who do not find the guarantee of the importer’s bank sufficient and wish to eliminate the country and political risk of the importer want to have a second bank (usually in their own country) add an additional payment guarantee to the letter of credit. This additional payment guarantee is called “confirmation” and this mechanism is in favor of the exporter. When confirmation is added to the export letter of credit, the creditworthiness of the principal bank with our Bank is considered, not that of the customer exporter. It is suitable for our customers who wish to carry out their transactions safely and professionally by benefiting from our Bank’s knowledge and experience in international trade.
Advantages:
- Eliminates the payment risk for the exporter.
- The risk of the buyer’s bank is assumed by the exporter’s bank.
- Offers the possibility of secure collection in commercial transactions.
- Provides a great advantage, especially in countries where political and economic risks are high.