L/C and performance bonds

[gibs0n]

Dear members,

We are a large manufacture of rice, and we are located in South East Asia.

A vessel with rice cost around 5 million USD delivered to e.g. West Africa. Pricing is almost always CIF to a port, and very often in Africa when it is large quantities.

I get more and more inquiries where:

Buyer will issue L/C and there is a 2% performance bond. Buyers are from everywhere such as US, EU and Africa etc. and they use major banks such as HSBC, Barclay, Deutsche Bank and CITIBANK etc. (Often branches in Africa though).

Now to the question:

If the buyer issue a L/C and we contact the bank and the bank say it is valid. Is there then any risk to pay the 2% performance bond?

(We can of course deliver the goods etc.)

Thank you in advance

[Mister X]

So 2% of 5mill = still 100k USD
Thats quite amouth for scamming..

Sorry I dont know how this sort off things works, but i can give you this tip.

If you have to call the local bank in that country do it ONLY with the phone number you have find yourself (online), and NOT use a number that was
given by the "costumer".
This will be your first win against scamming; bc you never know if the given number is from a real bank employer of from a "helper" in crime.
And with this amouth off $$ involved, to check it more then 2 times to be 200% sure.


** http://en.wikipedia.org/wiki/Performance_bond

[gibs0n]

Thanks :-)

If others have the same question as me, then have a look here:

http://letterofcreditforum.com/content/lc-and-performance-bond-it-safe#comment-14952

[Niseag]

easy, ask your bank to go back to the issueing bank via the advising bank and ask for a reference, if they use a money center bank than there is experience, your letter of credit department of your bank will know. you do this with someone if he has a good record, no fly by night etc operator, no reference from a reputable bank he should buy his rice in the store...

[Sapphire's Strike]

@ gibs0n

It would be helpful to us all if you would post the sender details of the email offer to you. Email headers would be even better. Thank you.