1. At present, the Cambodian export community as a whole suffers from the lack of trade finance / export credit, on two different aspects: first, from the low levels of trade finance provision due to the inexistence of domestic Exim Bank or other guarantee facilities as can be found in some other countries; and second, from what is available from domestic commercial banks, the terms and conditionalities are hard for Cambodian exporters/importers to obtain.86 Thus the current practice of TT transfer for rice trade. 2. Cambodia export market is 100% FOB and even late orders exported by airfreight on factories account will be executed by the nominated FOB-forwarder, with very little exception from this rule. The exporter pays the cost of export packing, the cost of delivering the goods to the carrier which will transport the goods to port and the loading charge. INCOTERMS are internationally accepted terms used to define exactly at what point costs, responsibilities and risks are transferred from the seller to the buyer during the transfer of goods from their source to their destination. 3. Before the payments are made the exporter has to send in the following documents pursuant to the Purchasing Order: “Contract terms:88DOCUMENTS TO BE PRESENTED: a. Original commercial invoice in triplicate. b. Full set of “clean on board” Bills of Ladings, issued to order, blank endorsed, marked “freight prepaid”. c. Certificates of origin (GSP Form “A”) issued in Cambodia. If the GSP form A certificate is issued after B/L date it must bear in box No. 4 the mention “issued retrospectively”. d. Weight certificate issued by CAMCONTROL, countersigned by ISC *. e. Quality certificate issued by CAMCONTROL, countersigned by ISC,* showing exact specification of rice and stating that the rice is milled from non-GMO paddy. f. Original Phytosanitary certificate, issued in Cambodian by competent authorities. g. Fumigation certificate issued by the competent authority stating that fumigation has been done with Phostoxine (Aluminium Phosphine). h. Sellers’ weight & quality certificate issued in the style agreed between sellers and buyers. Original documents to be delivered by first-rate courier service (with tracking possibility) to buyers’ address promptly after receipt of full payment. (for each lot separately).” 4. Letter of Credit requirements: Shipments under Letter of Credit require special documentary care for the Letter of Credit will stipulate method, timing of shipment, documentary requirements as well as the deadline for negotiation. The forwarder can advise the vessel or service, which meets the required shipment and negotiation dates. 5. The benefit of a letter of Credit is that cash is made available through a bank in the country of export and thus payment may be obtained locally by the seller against production of specified documents evidencing shipment. Normally a Letter of Credit is instructed by a buyer through his local bank and that bank's overseas representative called “Correspondent Bank" will advise the seller/beneficiary of the terms in writing. Letter of Credit terms must be strictly adhered to in all detail since payment will not be effected unless the documents presented correspond precisely to the requirements of the Letter of Credit. However, this being so, payment is immediate provided the credit is still current, i.e. unexpired as to date. 6. When attending to a Letter of Credit shipment, forwarders ask the exporter for a copy of the document in order to ensure that its terms are completely observed. The forwarder responsible for the shipping documents needs the fullest details of Letter of Credit conditions by far the best method is to supply a further copy of the document to support shipping instructions.
