International Settlement and Bank Guarantees

VTB is the leading Russian bank in handling foreign trade operations. Its obligations have traditionally been treated with sound confidence and trust in the international financial community.

VTB is one of the few banks in Russia, whose letters of credit and guarantees are unconditionally (i.e. without any additional guarantee or collateral) accepted by foreign banks and institutions. Therefore, its services in international settlement (especially in complex foreign trade deals) have always been much in demand and are placed among its priority products.

VTB Bank (including its branches and sub-offices) provides a complete range of top-notch banking services to provide comprehensive coverage of foreign trade contracts of its customers, namely the Bank:

• Offers consulting on any issue related to international settlement and foreign currency control under a foreign trade contract, at any stage of the deal in question (including drafting its terms and conditions);
• Executes international settlements under foreign trade contracts in any form applicable in the international banking practice – from a standard money transfer to customer-tailored payment schemes (including combined settlement patterns within a single contract, and if necessary, with credit and trade finance facilities being used);
• Offers a wide spectrum of international settlement services in the following forms:
  • Documentary letter of credit
    • Under import deals – from opening an L/C upon Customer request or acknowledging L/Cs issued by correspondent banks to making payments under such L/C;
    • Under export deals – from advising VTB customers and correspondent banks about L/Cs issued to their benefit by foreign banks, and accepting commercial documents for payment to receiving payment from foreign banks;
  • Documentary and clean collection:
    • Upon Customer request and to the benefit of such Customer, the Bank receives payment or accepts commercial and/or financial documents (bills or cheques), ensuring an adequate control over the documents and effecting communication until the payment and/or collection is received;
  • Bank transfer:

VTB duly and promptly effects settlement through transferring funds in foreign currencies:

• Credits proceeds received for its exporting customers;
• Makes payments within Russia and abroad;
• Makes advance payments under foreign trade contracts;
• Makes payments under transferable or ordinary bills, etc.

VTB makes international payments on the same day an instruction from its Customers or correspondent banks is received. Upon their request, such operations can be transacted within several hours.

• Executes guarantee operations:
  • Issues any bank guarantee / counter-guarantee, stand-by letters of credit; advises guarantees issued by other banks for Russian and foreign beneficiaries, claims payments, upon its Customer request, against other banks’ guarantees; certifies signatures on guarantees issued by foreign banks upon request of its Customers and other Russian legal entities.

VTB’s key advantages

VTB is a member of ICC Banking Commission. After the ICC Russian National Committee was established in 2000, the Bank also became a member of ICC RNC Banking Commission, which now allows the Bank to be always well-aware of the latest news and trends in the global documentary business and to participate in drafting uniform rules for guarantees and international settlements in the form of letters of credit and collection. Furthermore, the Bank’s representatives regularly participate in the Commission’s meetings, and actively contribute to drafting recommendations to settle disputes arising between parties to L/C or guarantee-backed operations, which become official recommendations of the International Chamber of Commerce for the international banking community. These activities underpin the Bank’s compliance with the existing international banking practice and are reflective of its recognition in the international settlement market.

VTB is also a member of the Association of Russian Banks and participates in various Task Forces set up by the Association (including those set up jointly with the Bank of Russia) in order to upgrade the legislative and regulatory grounds for Russian Ruble settlement within the Russian territory.
High-profile qualification of VTB staff, their long-standing expertise in handling foreign trade contracts (in particular, complex and even unique settlement schemes), country-wide network of branches located in the largest industrial cities and ports, a wide network of correspondent banks – all these factors are driving both the quality and the promptness of effecting settlement with any country of the world, as well as consolidating VTB’s competitive edge in the Russian market.

For its Customers, VTB holds free workshops and conferences on international settlement and foreign exchange control, especially to any change in Russian forex regulation. It also develops special manuals with comments and recommendations, such as:

• VTB Bank recommendations for settlement in foreign trade activities:
  • General recommendations for drafting contractual payment clauses;
  • General recommendations for applying L/Cs in settlement under foreign trade contracts;
  • General recommendations for applying bank guarantees in foreign trade turnover;
  • General recommendations for drafting payment clauses under export contracts; and
  • General recommendations for drafting payment clauses under import contracts;
• Circulars about VTB Bank Letters of Credit in Russian Rubles to be applied to settlement within the Russian Federation, about the legislation regulating foreign trade settlement, etc.

All you have to do to get the full spectrum of services in handling foreign trade contracts in Moscow is to apply to any of the Bank’s corporate sub-offices and become its customer.

For more details about VTB services and advantages in foreign trade servicing, please contact the Bank.