Confirmation of L/C       

Confirmation of L/C is the payment obligation undertaken by Bank of China for the beneficiary for adding payment undertaking beyond the risk of issuing bank.

Concerned to the ability of the issuing bank to pay particularly when that bank is in a high risk country or an unfamiliar bank, exporter may request buyer to instruct the issuing bank to have its L/C adding confirmation by the confirming bank (open confirmation) or upon the request of beneficiary, advising bank may add confirmation (silent confirmation)

1. Reduction of risks and acceleration of the capital turnover. Confirmation of L/C can help exporters mitigate the risks from the issuing bank including its country risk, as well to get payment earlier by Confirming bank upon compliant document ;
2. Double guarantee. Apart from the conditional payment undertaking made by the issuing bank, the exporters can get additional conditional payment undertaking from Bank of China, placing the exporters under double payment guarantee;
3. Payment collection guarantee. The exporters upon presentation that comply with the L/C’s requirements and approved by the Bank, may have the benefit of the non-recourse funds.

1. Exporters who wish to obtain payment confirmation from a bank other than the issuing bank;
2. Exporters who wish to obtain non-recourse funds after presentation of documents even if the issuing bank has a good credit standing.

1. Bank of China provides confirmation upon the request of the issuing bank or exporter (beneficiary) when advising the L/C;
2. The exporter presents the complying documents to Bank of China and Bank of China makes non-recourse funds or irrevocable payments promises to the exporter after examination and approval;
3. Bank of China despatchs the documents to the issuing bank to claim reimbursement and aim for the payment receipt under the L/C confirmation.