Minimum documentary requirements for sale of foreign exchange (FX) for trade transactions

CIRCULAR LETTER Series of 2001

To            :  All Universal and Commercial Banks

In line with Section 8 of Circular No. 1389, as amended, sale of foreign exchange (FX) for trade transactions must be supported by the following minimum documentary requirements:

1.   Importation under Sight LC (Reimbursing bank debits the account of the local banks on negotiation date)

copy of import letters of credit (LC)

original transmittal letter of foreign negotiating bank to local bank covering the import documents

telex from negotiating bank of cable negotiation done

proof of debit to the local bank’s account abroad

copy of original commercial invoice

copy of original first bill of lading (BL)

copy of report to BSP on LC opening and LC negotiation

2.   Importations under Sight LC but with documentary discrepancies which are sent on collection basis (Local bank remits payment to the negotiating bank after obtaining the client’s conforme to the discrepancies)

copy of the import LC

original transmittal letter of foreign negotiating bank to local bank covering the import documents

copy of authenticated/tested message of outgoing remittance

copy of original commercial invoice

copy of original first bill of lading

copy of report to BSP on LC opening and LC negotiation

proof of debit to the local bank’s account abroad

3.    Importations under Usance LC

copy of import LC

original transmittal letter of foreign negotiating bank to local bank covering the import documents

copy of the accepted draft

copy of original commercial invoice

copy of original first bill of lading

copy of authenticated/tested message of outgoing remittance

proof of debit to the local banks account abroad

copy of report to BSP on LC opening and LC negotiation

4.     Importations under OA/DA

for DA – accepted draft

copy of original commercial invoice

copy of original first bill of lading

copy of BSP registration of OA/DA

original transmittal letter of foreign bank to local bank covering the import documents for DA transactions

copy of report to BSP on OA/DA transactions booked

copy of authenticated/tested message of outgoing remittance

proof of debit to the local bank’s account abroad

5.   Importations under DP

original transmittal letter of foreign collecting bank to local bank covering the import documents

copy of original commercial invoice

copy of original first bill of lading

copy of authenticated/tested message of outgoing remittance

proof of debit to the local bank’s account abroad

6.   Importations under Direct Remittance (prepayments not allowed)

copy of original commercial invoice

copy of original first bill of lading (FX sale should not be beyond 15 calendar days from BL date)

copy of authenticated/tested message of outgoing remittance

proof of debit to the local bank’s account abroad

Remittance of payment to the beneficiary should be made immediately after sale of foreign exchange.

Bank must indicate the amount of foreign exchange sold below the phrase “FX SOLD” which should be stamped on the face of all original copies of the negotiable bill of lading and duly signed by the bank’s authorized signatory.  In addition, importer-client and bank must accomplish and submit notarized certifications, in the attached format, signed by the importer-client’s responsible officer and the bank’s officer with the rank of at least Vice-President, respectively.

Where the importer buys FX as payment for importations made through another (opening/booking) bank, the importer-client must submit to its FX selling bank(s) a notarized application to purchase FX, together with the requirements provided under Circular Letter dated 31 March 1998.

This Circular Letter shall take effect immediately.

FOR THE MONETARY BOARD

ALBERTO V. REYES Deputy Governor