Unless the Seller is so genuine that they have been doing solid business for more than a decade, I would decline making an irrevocable LC (Letter of Credit) a condition from a seller.
However given that it may affect a client’s goodwill and time is of the essence, If I had to go through with an irrevocable Letter of Credit, I would work on the legal clauses of the LC very very carefully in terms of what happens after the Swift code is shared with the Seller and the deadlines for inspection reports and deliveries etc.
On the other hand I have very little faith in revocable LC’s unless they are payable on sight of the goods information being shared.This is very much like Escrow accounts (the real third party ones).
However scammers have tried to scam a lot of my clients selling PPE via China by creating an emergency and asking for masks or PPE to be shipped out before a swift code appears for the seller.In one case a swift code never came for many weeks and it was later discovered that the broker/buyer were trying to forge some bank forms to show that the documents for LC had been submitted and somehow the bank was slow.
In my experience if you do not get a Swift Code for your LC in 72 hours, expect the worst.
Here is a Tip.In the post covid world, trust no one, until they prove otherwise.
And I would not make the LC transferable where smaller quantities are concerned.Businesses with good finance credit can cash a nice big amount on their LC and pay for the goods.In fact I would be slightly uncomfortable to see the LC being transferred via ten broker firms.
These are just my thoughts.In the end it is best to consider why you are choosing to do business with a newly established business, with no background in PPE.
If you need to make a decision on such a matter, send us an email at email@example.com
Your initial consultation will always be free.
You can have your Bank Performance Guarantee Terms Reviewed by our team as well as the terms of your irrevocable transferable Letter of Credit , as proposed by a prospective buyer/seller.