Overview of Forfeiting
- - “Forfeit” or “Forfait” originated from “à forfait,” meaning “transfer” in French.
- - Exchange recourse on export of goods and cash discount of export proceeds
- - Usance L/C (Shipper’s Usance only)
- - Discount without recourse to export
- - Credit of issuing bank
- - Less than 1 year
- - Usually in the form of bill of exchange or promissory note even though no special restriction is applied.
Types of Trade Receivable Discount
Transaction Flow Diagram
Advantages of Citibank
- - Worldwide network
- - Credit may be extended as credit line allocation among Citibank branches in the world has been established.
- - Quick procedure.
Main Target Customers
- - Exporter exporting goods by Shipper’s Usance L/C
- - Export who wants to eliminate export receivable from balance sheet without recourse
- - Minimum Amount: US$100,000
※Collection risk may be reduced when export process is handled by Citibank network all over the world.
Exporters are responsible for the following only.
- Legal issues on claim of proceeds
- Authenticity of Forfeit documents
- Issue on performance of exporter against importer
-
※The exporter is responsible for dispute on commercial trade and document.
