I am in China, when we do some fuel oil business with Russia oil company, they always ask us provide BCL and ICPO to them. But we do this business with Japan and Korea, they never need this BCL and ICPO, we just issue the L/C to them, it is ok. Someone could explain it to us???????we wonder if the L/C is useless....

Thanks in advance.

Replying to [qqgg]:

Nobody answer me?

Replying to [qqgg]: It is better to ask supplier to explain

Replying to [qqgg]:
The supplier wants to know the capability of the Buyer, to
if the buyer is serious and capable then The supplier will move
with the deal
Best Regards
Muhammad Aslam Memon
ID int786

Replying to [qqgg]:

Thanks a lot for all kind replies.
However, we can directly issue The L/C to supplier, why do they need BCL.?the buyer will afford additional fees in opening bcl.

Replying to int786,

what should I do? the supplier cannot obey their promise if we issue the bcl to them!

Quoting from [qqgg]:


I am in China, when we do some fuel oil business with Russia oil company, they always ask us provide BCL and ICPO to them. But we do this business with Japan and Korea, they never need this BCL and ICPO, we just issue the L/C to them, it is ok. Someone could explain it to us???????we wonder if the L/C is useless....


Thanks in advance.

qqgg,  If your business is to be long term with them and involve several shippments they want to make sure that you have sufficient credit/cash to complete the deal and not just payment for a couple of deliveries.  In your case of working with commodities LOI-ICPO is common practice.  In other areas of trade for large deals and even some smaller deals the supplier the BCL is sufficient with and at little or no cost.  If buyer insists on LOI-ICPO you may also ask them for an FCO.   As requirements are different in business in each country the Russian company may be asking for the documents as a means of complince to Russian law.

Best regards,

Ranger

Replying to [qqgg]:
thankls for your clear answer.

But how could we guarantee our business safety.you know in china, if our bank issus BCL, we will afford more expensive charges.

Thanks in advance.

Quoting from [qqgg]:


I am in China, when we do some fuel oil business with Russia oil company, they always ask us provide BCL and ICPO to them. But we do this business with Japan and Korea, they never need this BCL and ICPO, we just issue the L/C to them, it is ok. Someone could explain it to us???????we wonder if the L/C is useless....


Thanks in advance.

qqgg, a BCL does not have to be opened it is merely a statement from your bank on their letter head confirming that you have the cash on hand or credit with the bank to comply with the purchase agreement.  Also a BCL is not a contract.

Best regards,

Ranger 

Replying to [qqgg]:

But the banker will freeze our deposit if we ask the bank to issue the BCL in China.

Replying to [qqgg]:

we are told to freeze our deposit when we ask the bank to issue the BCL.