An Import Letter of Credit is appropriate if you are the buyer of goods or services. (Use an Export Letter of Credit if you are the seller of goods or services for your particular transaction.)
The Import Letter of Credit gives you Columbia Bank's promise to provide payment for your transaction, as long as all requirements are met. Our International Banking Department can help structure your Letter of Credit to meet your specific needs.
Benefits of the Import Letter of Credit:
- You provide a safe, acceptable method of payment to your seller.
- Virtually any currency can be designated for your Import Letter of Credit.
- Reporting of transactions is customizable to your specific needs.
We have the experience to guide you through this process, as well as answer any questions you may have so that you may take advantage of this useful tool.
An Export Letter of Credit is appropriate if you are the seller of goods or services. (Use an Import Letter of Credit if you are the buyer of goods or services for your particular transaction.) The Export Letter of Credit has established parameters that must be met for payment to be made.
Benefits of the Export Letter of Credit:
- You receive immediate notification when your Export Letter of Credit arrives.
- Documentation is processed so as to ensure quick payment, prior to releasing title to your goods.
A Standby Letter of Credit ensures payment in the event of default or non-performance by the applicant in connection with transactions or situations not necessarily involving the movement of merchandise. This instrument typically fulfills the terms of contract, removes the need for cash deposits, and can be used for performance and bid bonds, as well as other uses.
Benefits of the Standby Letter of Credit
- Domestic and international letters of credit are available for issuance.
- Serves to expedite transaction and delivery.
- Can be tailored to your specific situation or transaction.
- Can be used as collateral (rather than cash) to meet the terms of a contract.
We can help you utilize the Standby Letter of Credit for your particular transaction.
Apply for an Amendment
Most letters of credit only guarantee payment to a specific beneficiary; however, one beneficiary may transfer a letter of credit to another, who will become the second beneficiary. Transferable Letters of Credit must be designated as such by the issuing bank.
The beneficiary is allowed, through a Transferable Letter of Credit, to ask that the bank transfer part or all of the Letter of Credit to a separate party (or parties). The "second beneficiary" then receives the same rights as the original beneficiary.
Benefits of the Transferable Letter of Credit
- Allows you to conduct transactions using current or existing letters of credit.
- You can take advantage of opportunities as they occur.
- Full documentation of even complex transactions.
We can help your business be nimble and responsive should an opportunity arise—and take advantage of this type of credit.
Also referred to as "documentary credit," a Commercial Letter of Credit is issued by a bank that guarantees to pay a specific sum of money in exchange for documents representing the transfer of title to specific merchandise drawn and provided in accordance with pre-negotiated terms and conditions.
Benefits of the Commercial Letter of Credit
- Buyer (applicant) is assured of timely shipments as documents are presented and terms met before payment is made.
- Seller's (beneficiary) risk of non-payment is reduced and prompt payment is ensured upon complying documents.
We can help you take advantage of this unique tool whenever you have a need for it.
In collections, banks involve themselves in handling documentation given to them by the customer (seller) and act as an agent to collect payment. In the case of buying merchandise, the bank acts as an agent in processing the payment for the customer (buyer).
This type of transaction is common when the buyer and seller have had a long-term relationship and have developed a level of mutual trust.
We have the expertise to process the documents so that the payment can take place efficiently. This type of transaction is less costly than the letter of credit.
In direct collections, the seller will prepare and mail the documents to the overseas bank that has been nominated by the buyer. Please contact us and we will be happy to set you up with this type of transaction. This method saves time and also reduces the bank fees.
- Collection forms are provided to the seller at no charge.
- The bank has automatic tracing capabilities.
- Reporting of transactions are designed to fill your needs.
Wire payments are international instructions electronically transmitted to a foreign bank for immediate payment. They are the fastest and surest method of sending funds internationally.
In short, if you need it there or here now—wire transfers are the way to go. Wires can reach almost any foreign destination within two business days.
Not only are wire transfers quick and reliable, they can also save you money. With developments in technology and increased transparency in foreign currency transactions, it is now easy to send a wire overseas in the local currency of the receiving country. By doing so, you enjoy these benefits:
- Confirmed exchange rates
- Certainty of transfer amount
- Faster receipt of funds
When U.S. dollar wires are sent overseas to a non–U.S. dollar account, the receiving bank applies the exchange rate of their choice. Consequently, the final amount credited to your beneficiary may be considerably less than the amount you intended. By telling your banking officer that you want to send a local currency wire, you will know the exchange rate up front.
Additionally, wire transfers sent in the local currency move through clearing systems faster because they are treated as "local" items not requiring special attention. This means the money will be credited to the beneficiary's account faster, which is important if they are waiting on the funds.
When you receive a wire transfer of foreign funds through Columbia Bank, we convert the funds into U.S. dollars and credit your account automatically.
Columbia Bank can issue a foreign draft (check) payable in foreign currency drawn on a foreign bank. When issued the bank is notified by computer via telephone and satellite communications verifying authenticity of the draft.
Foreign drafts can eliminate the need to send U.S. dollar checks for collection, which can save you possible collection charges and fees.
Cashing Foreign Drafts
To eliminate the need for you and your business to endure a lengthy and expensive collection process, we can purchase your drafts drawn in foreign currencies and payable in foreign countries (with recourse), providing you immediate payment in U.S. dollars.
Columbia Bank buys and sells most foreign currencies. Major currencies—the euro, English pound, Mexican peso and Canadian dollar—are normally stocked at all times. Other currencies and special orders are available upon request and can be obtained within one or two business days.
A foreign currency rate sheet for nominal amounts is prepared daily by the International Banking Department. For large amounts, please call the Foreign Exchange Teller or the International Banking Department directly at 253-305-1903.
You can order currency over the phone (253-305-0423) or via fax (253-272-0105) and pick your currency up at any Columbia Bank branch, or at the International Banking offices in downtown Tacoma.
We carry the following currency at all times:
- Euro (Austria, Belgium, Finland, France, Germany, Greece, Ireland (Rep.), Italy, Luxembourg, Netherlands, Portugal and Spain)
- Mexican peso
- English pound
- Canadian dollar
A 50% down payment is required to order any foreign funds which we do not carry at all times and are therefore a special order.
Special order currency is available at the Columbia Bank branch of your choice two business days after we receive your order (three business days if we receive your order after 1:00 PM).
Foreign drafts are available at any branch the next day after requested or the same day at our International Banking offices at 1102 Broadway Plaza in downtown Tacoma.
Inventory currencies are available the same day at 1102 Broadway Plaza in downtown Tacoma, or the next business day at one of our branches.