Documentary credit for importers with UPAS clause
As an importer you want to get payment terms from your suppliers.
With the documentary credit UPAS clause, you can benefit from payment terms while allowing your supplier to be paid quickly.
Basic principles
The UPAS clause "Usance Payable At Sight" is an option included by the issuing bank in the documentary credit, at the request of the buyer, authorising the supplier to ask the issuing bank for a payment request while the documentary credit is payable at maturity.
In order to activate the UPAS clause, two conditions must be met:
- A payment request must be made by the supplier and sent to the issuing bank during the submission of documents required as part of the documentary credit.
- The documents sent must be clearly in-line with the terms and conditions of the documentary credit by the issuing bank.
The inclusion of a UPAS clause does not change anything in the operation scheme of the documentary credit.
Your needs
As an importing business, your company wants to get payment terms from your foreign supplier with whom you frequently do business. The negotiations are somewhat difficult because the latter wants to be paid immediately or will only agree to short payment terms.
In order to meet your respective cash flow requirements, you wish to offer them a solution which allows you to benefit from satisfactory payment terms while allowing them to be paid and without using lines of credit from their bank.
Benefits
- Optimisation of your cash flows without having to resort to bank lending: you are debited only on the due date stipulated in the documentary credit.
- Speed of availability: as soon as the documentary credit documents have been approved by our bank and it has received the request from your supplier, it is settled within 48 hours.
- Facilitate commercial negotiations by allowing your supplier to be paid immediately.
Illustration
After agreeing with your supplier on the terms and conditions of payment of your commercial transaction, you instruct our bank to open a documentary credit with UPAS clause in favour of your supplier.
After shipping the goods, your supplier submits the documents required in the documentary credit to their bank (the notifying bank) accompanied by a payment request, as authorised by the UPAS clause. These documents are then sent to our bank (the issuing bank).
Once the documents have been received, our bank will check that they are in-line with the terms and conditions of the documentary credit.
If the documents are all correct, our bank will pay the supplier as per the UPAS clause.
You will not be charged until the contractual deadline as stipulated in the terms and conditions of the documentary credit.
Our advice
If you are billed in a currency, consider taking out a currency hedging solution that will secure the price of your supply.
And more
Our expertise
- 450 experts in international trade at your service,
- A local presence in France and in 24 countries,
- A global presence,
- Additional solutions study for silent, del credere, mobilisation of receivables confirmation,
- Advice at each stage of the documentary credit.
- Internationally recognised sign of quality
Our risk-taking knowledge
- across more than 600 banks worldwide
- in 100 countries
Our partners
- with more than 150 banks forming our geographic coverage
Our internet portal allows you to carry out all your operations related to the documentary credit on-line
Member of:
- Local document processing centres, certified ISO 9001 for the majority of the Group’s institutions.
- Credit Agricole CIB is the first bank in Trade Finance in Western Europe. Named in the top 4 best banks for Trade Finance at a global level. (Source: Magazine Global Trade Review 2023).
