KOTA KINABALU, June 11 (Bernama) -- Local exporters and importers havebeen told to be careful and check thoroughly the details and conditionsset in the letters of credit from their overseas customers.RHB Bank Bhd's manager for marketing and business development, TradeServices Division, Mohd Radzi Md Jani said the letter of credit was apayment mode for imports and exports through a bank and that it containedthe terms of business agreed upon by both the importer and exporter.
"If there is any condition that is difficult to be fulfilled, the importeror exporter should seek to remove the condition," he said at aninternational trade seminar here Tuesday organised by the Sabah MalayChambers of Business Malaysia.
He said for instance if a deadline for delivery of product was too short,the importer should be asked to extend the period so that the productbeing ordered could be delivered according to specifications and intact.
They should also ensure that the names and addresses are spelt correctlyand not consider such matters lightly as they are very important, he said.
Local exporters and importers should also seek the advice of the banksissuing the letters of credit to help them ensure that they understand allthe conditions set by their customers.
There are some importers who have set various conditions for the export ofpalm oil such as how the palm oil for export should be stored in specialtanks and transported through ships less than 15-years-old to theircountries.
These conditions involve high cost and most probably do not bring profitsfor the exporters and therefore the exporters should be clever whenarriving at the business terms and take into account the costs involved toavoid losing out.
They do not have to fulfill all the conditions set by the customers, headded.
Therefore the terms of agreement between importers and exporters in theletter of credit should be studied carefully because they cannot becancelled once they are agreed upon, except with the agreement of the bankwhich issues it and the exporter.
(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News)