Third Country Export - Letter of Credit !

[Arunan TS]

WE ARE A STAR EXPORT HOUSE BASED AT CHENNAI ENGAGED IN THE EXPORT OF CONSTRUCTION MATERIALS FROM INDIA TO MALDIVES. OUR CARGO IS CURRENTLY RESTRICTED BY THE GOVT. OF INDIA. WE ARE PLANNING TO SUPPLY THE SAME TO OUR BUYERS FRM A THIRD COUNTRY.  WE HAD SOURCED THE PRODUCT FROM A THIRD COUNTRY AND SHALL LOAD THE CARGO FROM THAT THIRD COUNTRY TO MALDIVES IN THE VESSEL. THE VESSEL SHALL GO DIRECTLY FROM THE LOAD PORT TO DISCHARGE PORT WITHOUT COMING TO INDIA. WE ARE BUYING THE CARGO IN FOB BASIS AND SELLING IT IN CIF TERMS AS WE SHALL BE PAYING THE VSL FRT. WE SHALL RCV THE PAYMENT FROM OUR BUYERS BY TT UPON COMPLETION OF SHIPMENT.

FOR THE PURCHASE OF CARGO FROM THE THIRD COUNTRY, WE NEED TO OPEN A LETTER OF CREDIT TO THE SUPPLIER/SHIPPER. AS WE HAD APPROACHED OUR BANKERS TO ISSUE THE L/C BUT WE WERE BEEN INFORMED THE FLWG BY OUR BANKERS 

'With reference to the request made by you for opening LC for Construction Materials from a third country, our Treasury department has clarified that  export to Maldives is banned at present. On the same lines, merchant export  to Maldives is also deemed to be exports to Maldives. Hence, LC cannot be issued for  purchase of cargo  to Maldives though it is directly exported from the third country'

KINDLY, CLARIFY WHETHER WE CAN OPEN A L/C TO OUR BUYER OR NOT. DOES THE RESTRICTION OF EXPORTS BY THE GOVT.  RESTRICTS THE EXPORTS FROM THIRD COUNTRY ALSO ?

AI Summary

Company Faces Export Ban to Maldives, Seeks Clarification on Third-Country Shipments; Bank Refuses Letter of Credit A company based in Chennai, engaged in exporting construction materials to the Maldives, faces restrictions imposed by the Indian government. They plan to bypass these restrictions by sourcing and shipping the materials directly from a third country to the Maldives. The company intends to purchase the cargo on an FOB basis and sell it on CIF terms, receiving payment via TT after shipment. However, their bank has refused to issue a Letter of Credit (L/C) for the transaction, citing the ban on exports to the Maldives, including merchant exports. The company seeks clarification on whether the restriction applies to third-country exports.