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Corporate: Trade Finance Products

Raiffeisen Bank, having a specialized staff and a wide range of branches all over the country, offers advising service to its customers for the proper usage of the Trade Finance products in order to reduce the risk of commercial agreements related to trade transactions with the respective international partners and to offer tailor made products that better suit our customers’ needs. In addition, we have a considerable number of first-class correspondent banks located all over the world acting as our partners and achieving the successful performance of the Trade Finance products.

A Letter of Credit (Documentary Credit) is a financial instrument Import Lettersoffered by banks to assist exporters and importers in the settlement of their international commercial transaction minimizing the risk thereon. Being so, a Letter of Credit is an irrevocable and independent undertaking of the issuing bank to effect payment, against a complying presentation of the proper set of documents, which should be submitted in accordance with the terms and conditions of the Letter of Credit

Letters of Credit are payment instruments, not limited in covering Export Letters only the payment of goods, but also services and the implementation of specific projects. 

Letters of Credit are subject of the Uniform Rules for Customs and Practice for documentary Credits (ICC publications no.600).

Raiffeisen Bank Sha offers to its customers two types of Letters of Credit:

  1. Import Letter of Credit – This instrument is issued by Raiffeisen Bank Sha when its customer buys goods or services from their respective partners. We customize this instrument by offering our expertise and properly advising our customers in accordance with their needs for a specific transaction.
  2. Export Letter of Credit – is an instrument in which Raiffeisen Bank Sha receives the Letter of Credit in favor of its customers via SWIFT message or by a Letter from the importer’s bank (issuing bank) and advises it to its customers accordingly. In the cases when [TF1] our customers export goods or services, we suggest that the payment in their favor to be effected by Export Letter of Credit.  
What do we offer to our customers?
  • Issuance of Import Letters of Credit
  • Advising of Export Letters of Credit
  • Advising service from a specialized staff for Letters of Credit transactions

The use of Letter of Credit as a means of payment offers advantages for both parties involved in the transaction, the importer and the exporter.

  • The Buyer is assured that the payment of the goods or services will be effected only after the Seller will submit at the bank the set of documents as per the Terms and Conditions of the Letter of Credit.
  • The Seller will not investigate on the payment ability of the Buyer based on the fact that the risk related to the performance of payment is transferred from the buyer to the Issuing Bank/Confirming Bank.
  • The Seller will ship the goods or perform the service only after receiving and accepting the Letter of Credit as per the terms agreed and stipulated in the Commercial Agreement with the Buyer.
What parties should take note?
  • A Letter of Credit by its nature is a separate transaction from the sale or other contract on which it may be based. Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is included in the credit.
  • Bank sunder a Letter of Credit deal with documents and not with goods, services or performance to which the documents may relate. 
Documents Required

In order to initiate the procedures for opening a Letter of Credit the Client has to deposit:     

  • The signed Commercial Agreement between parties or
  • The Proforma Invoice issued by the Seller.
Financing Alternatives

For the issuance of a Letter of Credit the applicant will apply for a credit facility at our bank covered by cash collateral or other types of collateral as agreed with the Bank. 

A Bank Guarantee is an instrument offering security to the parties in a transaction, in the event that their counterparty fails to perform satisfactorily under the underling agreement. Being so, a Bank Guarantee is an irrevocable written undertaking of the issuing bank (the guarantor), issued for account of the applicant and in favor of the beneficiary, to pay to the beneficiary any amount up to the maximum amount specified in the guarantee, upon receipt of a complying written demand for payment from the beneficiary, in case of non-fulfillment from the applicant of contractual obligations that are subject to the guarantee.

We issue Bank Guarantees subject to Uniform Rules for DemandGuarantees (URDG, Publication No. 758 of ICC) or Albanian Law. 

Standby Letter of Credit is an instrument generally used to assure non-performance or payment by the counterparty in an underlying transaction. Differently from a Bank Guarantee, a Standby Letters of Credit has a flexible format, and it is subject to Uniform Rules for Customs and Practice for Documentary Credits (ICC publications no.600). 

What do we offer to our customers?

1. Issuance of different types of direct and indirect Bank Guarantees in favor of beneficiaries within and outside Albania including:

Payment Guarantee – is issued for account of the applicant to assure payment
of goods and services in favor of the beneficiary.

Advance Payment Guarantee – is issued for account of the applicant to assure usage of the advance payment amount in accordance with the contract

Bid Guarantee - is issued for account of the applicant that participates in a Bid

Performance Guarantee - is issued for account of the applicant to assure fulfillment of contractual obligationsCustoms Guarantee

Customs Guarantee- is issued in favor of customs authorities to cover fulfillment of customs obligations.

Stand by Letters of Credit- issued to cover different types of obligations.

2. Wording of guarantee texts. Our texts are tailored to your underlying relationship. Upon your request, we will support you as early as during the contract negotiations, which could result in additional benefits for you or your customers.


The Bank Guarantee comprises a security for the beneficiary to assure him that he will be compensated for any loss/ damage upon presentation by his side of a complying demand for payment to the issuing bank-

The Bank Guarantee creates the possibility that the buyer is awarded more favorable credit terms from the Seller

What parties should take note?

The Bank Guarantee is independent of the underlying relationship between the parties and the bank cannot withdraw from its undertaking as guarantor, irrespective of any disputes arising between the parties.

A Bank Guarantee can be cancelled before its expiry only by its Beneficiary written confirmation.

Documents Required

Depending on the required type of the guarantee, the customers of Raiffeisen Bank sha should deposit a scanned copy of the contract signed by either party, Bid Data Sheet, Contract Award notification or a different document to justify the agreement between the parties and the object of the required guarantee.   

Financing Alternatives

For the issuance of a Bank Guarantee the applicant will apply for a credit facility at our bank covered by cash collateral or other types of collateral as agreed with the Bank.

Documentary Collection is a payment instrument in which the Exporter through its bank sends to the Importer’s bank a set of documents related to a specific shipment of goods, along with relative payment instructions.

The set of documents is handed by the Collecting bank to the importer only after the Importer performs the payment of the value of the documents or accepts the payment obligation at a later date.

The only method of payment, Raiffeisen Bank Sh.a uses for Documentary Collection is:

  • D/P – Documents are released against sight payment from the Importer.

In the transactions of Documentary Collection, the banks only mediate fulfillment of payment instructions, but do not have any responsibility for checking documents presented by the Exporter.

Documentary Collection is subject to URC (Uniform Rules for Collections, ICC Publication no.522)

What do we offer to our Corporate and SE customers?
  • Collecting and forwarding documents to the Importer’s bank at the request of Raiffeisen Bank Sha’ customers (Exporters) and as per their instructions.
  • Advising Import Documentary Collections received by Raiffeisen Bank sha from Exporter’s banks.
  • Assistance/ advising service from a specialized staff for all Documentary Collection transactions.

These transactions cost less than the Letters of Credit, however they are riskier and therefore inclusion in a similar transaction would require the parties to have a considerable level of mutual trust and knowledge.

What parties should take note?
  • The Importer’s bank does not have any obligation regarding the payment.
  • The Exporter cannot make sure that the Importer will pay/ accept documents presented by his side to the Importer’s bank. 
  • The Importer’s financial situation can change prior that the documents reach the counters of his bank or prior to the maturity date for payment.