Can letter of credit settlement be used in import agency business?
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I have only been in charge of my company's import agency business for a short period, and we have always used T/T settlement before. The German precision machine tool supplier we cooperate with this time insists that we issue an irrevocable sight L/C, with a total cargo value of around RMB 12 million.
I am a bit worried that as the agent, the L/C issuance responsibility and title control will conflict with the agreement signed with the consignor. Are there any changes in the 2026 new foreign exchange administration regulations?
Will inconsistency between L/C documents and customs declaration forms lead to cargo detention? If discrepancies occur, shall we bear the liability? Also, will the requirement of designating a European issuing bank increase compliance difficulty?
WilliamYears of service：10Customer Rating：5.0
International Logistics AdvisorStart a Chat
Using L/C for import agency is fully compliant，and the 2026 new cross-border settlement regulations have greatly simplified the operation process. The following is a full-chain breakdown of implementation:
First，for the pre-verification link，the L/C draft shall be compared one by one with the consignor's procurement contract and customs HS code requirements，focusing on checking contents such as bill of lading title，goods description，inspection certificate standards. In 2026，the customs has launched the cross-border document intelligent comparison system，which can give an early warning of discrepancies 72 hours in advance to avoid customs clearance obstruction.
Second，for the connection of core nodes，the risk sharing clauses between the agent and the consignor shall be clarified before L/C issuance. When presenting documents，ensure all document information is completely consistent with the customs declaration form. For the foreign exchange payment link，give priority to using the CIPS system to complete compliance declaration，and retain complete vouchers of L/C issuance，document presentation and foreign exchange payment for verification.
Finally，for abnormal plan handling，if discrepancies occur，immediately coordinate with the consignor and the supplier to negotiate for exemption or clause modification. If the cargo arrival time is earlier than the document presentation period，you can apply to the carrier for extension of free storage period，or apply to the issuing bank for L/C extension，to avoid port detention charges.
OliviaYears of service：5Customer Rating：5.0
Senior Customs AdvisorStart a Chat
When using L/C for import agency, you shall focus on the consistency between customs documents and L/C. In 2026, the customs has realized automatic comparison between L/C documents and customs declaration forms.
If information such as bill of lading consignee, goods description and HS code is inconsistent with the declaration content, the system will directly trigger control and inspection. For high-value equipment, the customs will also check the consistency between the certificate of origin and the country of origin information indicated on the L/C.
If the L/C does not clearly mark the country of origin, you shall supplement and modify the clauses before document presentation, otherwise it will affect the application for tariff reduction and exemption. The agent shall submit the L/C draft to the customs for pre-examination in advance to obtain compliance opinions, to avoid subsequent customs clearance obstruction.
EllaYears of service：10Customer Rating：5.0
Senior Financial AdvisorStart a Chat
When using L/C for import agency, title control is the core point. In 2026, international ocean bills of lading have fully realized electronic endorsement.
The agent can query the title status in real time through the ocean shipping platform, to ensure that the title still belongs to the consignor or the agent before receiving the payment confirmation from the issuing bank. Note that if the L/C requires "order bill of lading", you shall clarify whether the endorser is the agent or the consignor, to avoid title transfer disputes.
In addition, you shall match the L/C document presentation period with the cargo arrival time. If the arrival time is earlier than the document presentation period, you can apply to the carrier for extension of free storage period, or apply to the issuing bank for L/C extension, to avoid port detention charges and container detention charges.
JohnYears of service：6Customer Rating：5.0
Export Tax Rebate AdvisorStart a Chat
Using L/C for import agency will not directly affect import taxes and fees, but you shall pay attention to tax compliance details. In 2026, the VAT deferment policy has covered all general trade imported goods.
The agent can explicitly require the supplier to provide overseas VAT vouchers that meet the deferment requirements in the L/C clauses, to ensure the consignor can defer the payment of import VAT. If there is an affiliated transaction between the consignor and the agent, you shall clarify the consistency of goods flow, capital flow and document flow in the L/C clauses, to avoid being identified as BEPS risk by the tax authority, and retain all L/C related vouchers for tax verification at the same time.
DavidYears of service：3Customer Rating：5.0
Business Development AdvisorStart a Chat
Using L/C for import agency shall strictly comply with the 2026 new foreign exchange administration regulations. You shall give priority to banks connected to the CIPS system as the issuing bank, which can reduce exchange loss and shorten the account arrival time. Ensure that the L/C beneficiary information is completely consistent with the supplier's industrial and commercial registration information, to avoid verification by the foreign exchange administration due to inconsistent payees.
The agent shall complete the online declaration on the foreign exchange monitoring system within 3 working days after foreign exchange payment. If there are multiple L/C transactions, you shall establish a ledger to record the issuance, document presentation and foreign exchange payment of each transaction for random inspection by the foreign exchange administration.
CharlotteYears of service：4Customer Rating：5.0
Currency Exchange AdvisorStart a Chat
When using L/C for import agency, you shall clarify the risk sharing clauses in the agreement. You shall agree on the "discrepancy handling authority" in the agency agreement, that is, when discrepancies occur, the consignor shall decide whether to accept the discrepancies and make payment, and the agent shall not accept the bill without authorization.
You shall require the supplier to add a "soft clause exemption clause" in the L/C, to avoid uncontrollable clauses such as "the inspection certificate shall be issued by the L/C applicant". If the issuing bank has bankruptcy risk, you can require the consignor to provide a standby letter of guarantee to protect the agent's capital security.
SophiaYears of service：7Customer Rating：5.0
Senior Customs AdvisorStart a Chat
When using L/C for import agency, if the goods are subject to customs control and inspection, you shall prepare relevant documents and materials in advance. In 2026, the customs inspection site has realized electronic document retrieval, and the agent only needs to submit the electronic copy of the L/C. During inspection, the packaging and shipping marks of the goods shall be consistent with the description on the commercial invoice and L/C.
If packaging damage is found, you shall take photos for retention and indicate it in the inspection certificate, to avoid cargo detention due to inconsistency between documents and actual goods. If inspection is required, ensure the content of the inspection report is consistent with the inspection standards required by the L/C.
DanielYears of service：8Customer Rating：5.0
Legal AdvisorStart a Chat
When using L/C for import agency, the goods packaging shall meet the explicit requirements of the L/C. For special goods such as precision machine tools, you shall clearly specify details such as packaging materials, reinforcement methods and shipping mark identification in the L/C clauses, for example, requiring the use of wooden packaging and providing IPPC fumigation certificate, and the shipping mark shall be marked with L/C number, consignee information, etc. In 2026, the compliance requirements for packaging in international ocean shipping have been further tightened.
If the packaging does not meet the requirements, the carrier will refuse to load the goods, leading to delay of the L/C document presentation period. The agent shall review the supplier's packaging plan in advance.
AlexanderYears of service：10Customer Rating：5.0
Senior Trade AdvisorStart a Chat
Using L/C for import agency can optimize the capital flow of the supply chain. In 2026, cross-border supply chain finance has been connected with the L/C system. The agent can apply for factoring financing from the bank with the undue L/C, to ease the capital pressure.
You shall pay attention to selecting factoring institutions that cooperate with the issuing bank, to ensure the compliance of the financing process. You can match the payment time with the goods sales receipt time through L/C clause design, for example, agreeing to "make payment within 30 days after the goods are sold", to reduce the consignor's capital occupation cost and improve the overall supply chain efficiency.