Detailed explanation of foreign trade beneficiary declaration and letter of credit presentation process

In foreign trade transactions, the beneficiary statement and letter of credit presentation process are important links to ensure safe foreign exchange collection. The beneficiary usually refers to the exporter, and its relevant declarations and presentations must comply with legal and letter of credit requirements.

Definition and format of beneficiary statement

The beneficiary statement is mainly used to provide certain statements at the customer’s request when official documents cannot be produced, which may involve letters of guarantee and other contents. This statement only applies to letter of credit operations. There is no fixed format for its writing, but it is recommended to include the following content:

• Title: Use “BENEFICIARY CERTIFICATION”.
• Start of the text: “WE HEREBY CERTIFICATE THAT …” followed by the specific matters that the customer needs to declare.
• Date and Signature: Stamp the company seal and mark the date to show formality.

Example:

BENEFICIARY CERTIFICATION

DATE: 08.OCT.2005

WE HEREBY CERTIFICATE THAT COPY OF ALL SHIPPING DOCUMENTS HAVE BEEN FAXED DIRECTLY TO XXXXXX WITHIN 5 DAYS AFTER FROM B/L DATE.

FUDA IMP&EXP CO., LTD.
NO.88 XINHUA RD, SHANGHAI, CHINA 200020

Specifications for the presentation of documents by the beneficiary of a letter of credit

To ensure the safety of remittance, the beneficiary must ensure that all documents comply with the provisions of the letter of credit when presenting documents. This includes the type, name, number of copies and content of the document, while avoiding any traces of unauthorized modification.

The beneficiary’s presentation of documents must be carried out within a reasonable time. This time period shall be determined based on the earlier of the expiration date of the letter of credit and the latest date of presentation. If the date falls on a non-business day of the bank, it can be postponed to the next business day. However, if bank operations are interrupted due to force majeure events, the bank will not be held responsible after the expiration date unless authorized by the applicant for issuing the certificate.

The place of presentation is usually the designated negotiating bank specified in the letter of credit. It is also allowed if the beneficiary submits it directly to the issuing bank or confirming bank. However, in this case steps should be taken to ensure that the same documents are not submitted twice, thereby avoiding duplication of payments or acceptances.

In addition, the original letter of credit and all amendment notices must be submitted when presenting documents for bank review.

Overall, understanding the beneficiary statement and the presentation process of the letter of credit is a key step to ensure the smooth progress of foreign trade transactions. This is not only related to the security of remittances, but also affects the trust and cooperative relationship between the parties to the transaction.