France Letter of Credit Transactions

What are the key points of consideration as an exporter when working with a letter of credit which is issued in France or as an importer when issuing a letter of credit for a French exporter?

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France is a European country, which is located northwestern of Europe.

It is bordered by Belgium, Luxembourg and Germany to the northeast, Switzerland and Italy to the east, and Andorra and Spain to the south. (1)

Historically and culturally among the most important nations in the Western world, France has also played a highly significant role in international affairs, with former colonies in every corner of the globe.

Bounded by the Atlantic Ocean and the Mediterranean Sea, the Alps and the Pyrenees, France has long provided a geographic, economic, and linguistic bridge joining northern and southern Europe.

It is Europe’s most important agricultural producer and one of the world’s leading industrial powers. (2)

On this page you can find brief information in regards to French economy and international trade, French banks and letter of credit usage tips specific to France.

overview of france international trade

France Exports at a Glance:

As of 2017 France is the 8th biggest exporting country in the world. France’s 2017 exports declared as 535 billion US dollars in value.

France is not only exporting high value added manufacturing goods such as aircraft, medicaments, motor cars, turbo jets etc., but also selling agricultural products like wine, cheese, wheat, animal feed etc. to world markets.

France is one of the biggest agricultural goods exporter in Europe.

The most significant export destinations of China are European Union (28): %59.7, United States of America: %7.4, China: %3.6, Switzerland: %3.5 and Turkey: %1.6.

Top Exported Products of France (2017)

Agricultural GoodsNon-Agricultural Goods
Wine of fresh grapesOther aircraft
Alcohol of less than 80% volumeMedicaments in measured doses
Wheat and meslinMotor cars for transport of persons
Cheese and curdParts for motor vehicles 8701-8075
Preparations of a kind used in animal feedingTurbo-jets, turbo-propellers and ot

France Imports at a Glance:

France is the 6th top importing country as of 2017 statistics. The import trade value of France in 2017 declared as USD 624 billion.

As of 2017, France’s main imports are: motor cars (USD 31.8 billion), air craft spare parts (USD 21.6 billion), crude oil (17.9 billion), petroleum oils, other than crude (USD 15.2 billion), medicaments (USD 15.0 billion).

France’s major import trading partners are the European Union, China, the United States of America, Switzerland and Japan.

Top Imported Products of France (2017)

Agricultural GoodsNon-Agricultural Goods
CoffeeMotor cars for transport of persons
Bread, pastry, other bakers' waresParts of goods 8801, 8802
Chocolate and other cocoa foodPetroleum oils, crude
Cigars, cheroots, cigarillosPetroleum oils, other than crude
Cheese and curdMedicaments in measured doses

Banks in France:

According to the French Banking Federation (FBF) there are 347 banks actively operating in France as of October 2018.

French banking system is working under European Union rules.

One of the biggest Fren

BNP Paribas SA: One of the best French bank established in international scale. Operating in 73 countries. Great history of banking.

Credit Agricole CIB: Corporate and Investment banking branch of the Credit Agricole Group. The group has not only international bank branches in Europe, but also subsidiary banks in certain countries in America, Asia, Middle East and Africa.

Societe Generale: Another well established French bank. Very strong in Latin America and Africa.

Natixis CIB: Naxitis is a subsidiary of Groupe BPCE, which is one of the biggest banking group in France. Naxitis’s international branches are concentrated in America and Asia.

Credit Industriel et Commercial (CIC): A major actor in the French banking sector, the CIC has an international network made up of 36 countries through its international network of 36 representative offices and 4 foreign branches: Targobank (Spain and Germany), BMCE Bank (Morocco), Bank of Tunisia (Tunisia).

Letter of Credit Usage Tips Specific to France:

Tips to the Importers:

  • Letter of credit is not popular among French exporters.
  • Try to establish a simple and well defined letter of credit in order to complete the transaction smoothly.
  • France is located northwestern of Europe and very close to most its trading partners logistically. Be aware of document presentation periods, demurrage and detention charges.
  • France exporters and importers use land transportation very often. Keep in mind that land transportation has some disadvantages under letters of credit.

Tips to the Exporters:

  • Although France is one of the most developed countries in the world, it is still a cosmopolite country. Fraud risk is limited, but not null. As an exporter take steps to minimize your risks.
  • Try to get the letter of credit issued by one of the well established banks in France.
  • France is located northwestern of Europe and very close to most its trading partners logistically. Be aware of document presentation periods, demurrage and detention charges.
  • France exporters and importers use land transportation very often. Keep in mind that land transportation has some disadvantages under letters of credit.
  • As an exporter you might need either a European Community Certificate of Origin, EUR1 movement certificate or an ATR document. Consult your customs broker to choose the right one before issuance of the letter of credit.

References:

  1. https://en.wikipedia.org/wiki/France
  2. https://www.britannica.com/place/France
  3. https://www.wto.org/english/thewto_e/countries_e/france_e.htm