Writing as a trade finance professional with a long background in the business, Dave Meynell offers his personal views on factors contributing to the sharp reduction in ICC Official Opinions issued over the past several years.
Zahoor Dattu is a Senior Trade Services Specialist at Wells Fargo Bank NA, USA. The views expressed are those of the author and do not represent the views of Wells Fargo Bank.
When issuing banks insert complex reimbursement terms and self-serving conditions into their credits, it distorts the purpose of the product, causes problems for confirming banks, and drives exporters away from using LCs.
The silent confirmation market is still active and prevalent for LCs in Asian countries as silent confirmation is one of the means for a beneficiary to mitigate issuing bank and country risk when it does not want other banks to confirm its credit.
