Import Documentary Credit

As an importer, you can use an Import Documentary Credit (Import Letter of Credit) to provide your suppliers with CIBC's undertaking that they will receive payment upon the delivery of the required documentation within a particular timeframe, as specified in the Import Documentary Credit. Using an Import Documentary Credit reduces the risk of having to pay for the goods in advance by requiring that the documents presented by the exporter are consistent with the pre-arranged terms of the Import Documentary Credit.

If the beneficiary of your Import Documentary Credit is not the actual supplier of the goods, a Transferable Credit may be more suitable for your business needs. Learn more about the benefits of a Transferable Credit.

For high volume importers, CommLinc LC™ can help organize your transactions.

Key benefits

1. Reduces your payment risks

  • Enables you to potentially negotiate better prices with your suppliers, as payment to your suppliers is guaranteed by CIBC provided the terms of the Import Documentary Credit are complied with
  • With an Import Documentary Credit as security for payment, your suppliers should not insist that shipments be secured by cash in advance

2. Improves your operational efficiency

  • CIBC Trade Finance will issue the Import Documentary Credit, handle document checking and payment to the suppliers and track the transaction status of the Import Documentary Credit
  • Through CommLinc LC™, qualified importers can initiate and receive information on an Import Documentary Credit issued by CIBC via the Internet, which may:
    • Increase the overall efficiency of communications with CIBC and your suppliers
    • Facilitate communication directly with CIBC's processing centre to initiate the issuance of Import Documentary Credits, thus reducing processing time
    • Help you find current Import Documentary Credit information (e.g., account activity and summary of outstanding Import Documentary Credits)
    • Allow you to transfer Import Documentary Credit information to a number of reporting package options to create customized reports
  • Our trade finance experts provide you with structuring, mitigation and financing expertise and up-to-date country and trade risk guidance to support and expedite your trade transactions

3. Gives you greater control over your trade activities

  • Since Import Documentary Credits stipulate a latest shipment date and a latest period for presentation of shipping documents, importers are provided with more transaction certainty and security
  • An Import Documentary Credit assists importers and exporters in facilitating international trade where open account terms are not practical or preferred, especially when you are doing business in a new country

Is it for you?

An Import Documentary Credit may be for you if you:

  • Engage in import transactions
  • Want to minimize your risks in international trade
  • Require greater control over shipping dates and receipt of documents for your imports

Please note:

The above is intended to be only a general description of these products and their features. Certain conditions, restrictions and exceptions may apply. CIBC reserves the right to change or discontinue these products or any of their features at any time. These products and their features shall be subject to the terms and conditions of the applicable agreement governing their use. For more information, please contact our Trade Finance team.

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