Ethiopia - Methods of Payment Ethiopia - Methods of Payment
There are various methods of receiving payment for products sold in Ethiopia, the selection of which is usually determined by the degree of trust in the buyer's ability to pay. Payment alternatives that U.S. exporters might consider, in order of the most secure to the least secure, include:
• Confirmed irrevocable letter of credit (if concerned about the importer and international standing of his bank)
• Irrevocable letter of credit (if concerned only about the reliability of the importer)
• Documentary collection (cash against document)
• International Telegraphic Transfer (when the transaction is below $5,000 and for certain types of goods, such as urgent medicine).
As a general rule, U.S. exporters selling to Ethiopia for the first time are advised to transact business only on the basis of an irrevocable letter of credit, confirmed by a recognized international bank. Any other form of payment carries a high level of risk. Using a Letter of Credit may result in delayed collection of receivables due to a shortage of foreign exchange.