TRADE SERVICES

Siket Bank provides efficient and excellent trade services to support its customers' global trade activities. The bank offers a seamless, standardized, and reliable end-to-end workflow to facilitate its customers' trade-related operations.

1. Import

1.1. Letter of Credit (LC) /Documentary Credit

A documentary letter of credit is a bank's commitment or undertaking, issued at the request of a buyer, to pay a specified amount to a seller upon the presentation of compliant documents meeting the LC's conditions. This transaction is governed by ICC's Uniform Customs and Practice (UCP) 600, applicable directives from the National Bank of Ethiopia, and the bank's own policies.

Siket Bank opens two types of letters of credit for the import of goods into the country:

A. Letter of credit at sight

This allows the seller to be paid immediately upon presentation of the required documents.

B.  Letter of credit on acceptance

 This type of letter of credit requires the importer to accept the draft or bill of exchange, allowing for deferred payment. However, this must be approved in advance by the National Bank of Ethiopia.

The required documents typically include a pro-forma invoice, insurance certificate, license, LC application, and tax ID and any other documents that may be requested depending on the specific circumstances.

1.2. Cash Against Document (CAD) /Documentary Collection

Cash Against Document (CAD) / Documentary Collection is a secure payment method where an exporter's bank collects payment from the importer's bank in exchange for shipping documents. 

Siket Bank provides both standard and customized collection services for import needs, supporting both Sight (D/P- Documents against Payment) and Acceptance (D/A- Documents against Acceptance- with prior approval of NBE) collections.

The required documents typically include a purchase order, pro forma invoice, insurance policy, license, and tax ID certificate, and any other documents that may be requested depending on the specific circumstances.

 1.3. Advance Payment

Advance Payment is a method where the seller receives payment from the buyer before the shipment or delivery of goods/services. The maximum amount that can be approved for advance payment from a single supplier is USD 50,000 or the equivalent value in other foreign currencies. If the advance payment exceeds this amount, the buyer/importer must provide an advance payment bank guarantee for the amount exceeding $50,000 or it must be approved by the National Bank of Ethiopia.

• However, these requirements are exempted for advance payments made from non-resident foreign currency accounts, except from retention accounts.

The required documents for an Advance Payment transaction typically include a pro forma invoice, license, insurance certificate, an undertaking letter for the entry of goods, and a tax ID certificate. Additional documents may be requested as needed based on the specific documentation requirements.

2. Export

Siket Bank shall allow the Export of goods, Except for gold, upon the submission of compliant documents.

2.1. Letter of Credit (LC) at Sight and on Acceptance

An export letter of credit is a financial instrument issued by a foreign bank on behalf of its importing customer to facilitate payment to the exporter who is a customer of Siket Bank.

Required Documents: Valid trade license for export, Export application from duly completed, Authenticated irrevocable and/or confirmed letter of credit, duly completed Invoice, Sales contract and any other documents that may be requested depending on the specific circumstances.

2.2. Cash Against Document (CAD) at Sight and on Acceptance

Under this mode of payment the exporter ships the agreed-upon goods to the buyer and then presents the shipping documents along with a cover letter to the bank in order to collect the payment.

Required Document: Valid trade license for export, Export application from duly completed, undertaking letter repatriation of the foreign exchange, duly completed Invoice, Sales contract and any other documents that may be requested depending on the specific circumstances.

2.3. Advance Payment

Under this mode of payment the exporter receives foreign currency (cash) in advance from the buyer before goods are shipped.

Required Documents: Advance payment (Bank Transfer) receipt (Incoming Telegraphic Transfer) or Debit card/Credit card, Cash notes declared at customs and deposited at forex-bureau, invoice duly completed, sales contract, valid trade License for export forex-bureau and any other documents that may be requested depending on the specific circumstances.

2.4. Consignment

The consignment export refers to a trade arrangement where the exporter ships goods to the overseas buyer, but retains ownership of the goods until they are sold by the buyer. The exporter only receives payment from the buyer once the goods are sold.

This method is typically used for perishable items like fruits, cut flowers, meat, live animals, molasses, and other products on a list provided by the National Bank of Ethiopia (NBE)

Required Documents: Invoice duly completed, sales contract, valid trade License for export, undertaking letter committing to repatriate the proceeds  and any other documents that may be requested depending on the specific circumstances.

Open Account Export

This method shall be applicable for e-commerce exports and any other export transactions explicitly granted permission by NBE.

Exporters who utilize Open Account method of payment shall be required to present: Undertaking letter for repatriation of Export proceeds and other requirements as specified by NBE.

Small Export Items

Siket Bank permits the export of small items—including souvenirs, household goods, product samples, machinery, and other items—by tourists, foreign residents, and Ethiopian nationals, all in compliance with the National Bank of Ethiopia's Directives and value thresholds.

The small export items shall be sent abroad for sample(promotion), gift, repair, replacement, exhibition and trade fair and personal effects and belongings etc