Bank of China and China Guangfa Bank have both for the first time used an electronic back-to-back letter of credit (L/C) solution in an international transaction.

The transaction took palace over the online Bolero platform using its ePresentation solution.

Arrangements

The electronic back-to-back documentary credit was used to facilitate a large iron ore shipment from BHP Billiton in Australia to Shougang, one of the largest steel companies in mainland China.

The transaction was arranged jointly with National Australia Bank (NAB), Bank of China and China Guangfa Bank.

Transaction details

The L/C was issued for Shougang by China Guangfa Bank, with the beneficiary being Shougang's trading arm in Hong Kong. Bank of China then issued the L/C to NAB in favour of BHP Billiton.

NAB, on behalf of its customer, BHP Billiton, also checked an electronic bill of lading (eBL) for compliance with the L/C before the documents with eBL went through Bank of China and China Guangfa Bank to Shougang for their electronic surrender of the eBL to the carrier.

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