Special types
Overview

The following special types of credit are available to you:

Standby Letter of Credit. The standby letter of credit comes from the banking legislation of the United States, forbidding US credit institutions from assuming guarantee obligations vis-à-vis third parties.

Revolving credits. Revolving credits cover consignments in a number of instalments at set intervals up to a maximum amount. They are denominated in units equivalent to the value of the first instalment. On utilization, the credit is automatically self-renewing by the same amount for a pre-determined number of consignments. In practice, this type of documentary credit is rare and not widely known.

Red/Green-clause credit. The exporter is advanced part of the credit prior to presentation of the documents. As such, he enjoys pre-financing of the goods to be delivered, with which he can procure the relevant raw materials and, if necessary, cover part of the production costs.
A green-clause credit differs from a red-clause credit in that the goods must be warehoused. The exporter must therefore usually present a warehouse receipt in addition to the other documents. The other components are basically the same as for the red-clause credit.