Down Payment is a form of payment that operates in the form of a transfer of the cost of goods to the account of the exporter by the importer via bank transfer, without waiting for the exporter to send the goods, immediately after the contract.
In accordance with the agreement between the exporter and the importer, it begins when the exporter sends the goods to customs. The document representing the goods is sent to the destination bank by the exporter and to the importer by the destination bank. Documents are handed over to the importer in exchange for payment of the goods or acceptance of the exporter's policy. By means of these documents, the importer has the chance to withdraw goods from customs.
The letter of credit concerns the assurance provided to the seller (payee/exporter) by a bank (the issuing bank) which issues a Letter of Credit with a specific amount and term, upon the order of the importer (payer/importer), regarding the payment of the price of the goods through a bank in the seller’s own country, upon the submission of the documents complying with the conditions defined in the Letter of Credit.
Saudi Export Program (SEP) is a program established to increase the export of non-oil goods from Saudi Arabia at the request of the King of Saudi Arabia. Imports can only be made from Saudi Arabia. It applies to all goods except crude oil.
The term of credit is 18 and 36 months. There is a RUSF (Resource Utilization Support Fund). Payment is done by Sight Letter of Credit.
The payment is in the form of a single instalment at the end of the maturity as “capital + profit share”.