Bank Charges

Bank Charges refer to the various fees charged by banks to customers for providing services such as letters of credit, collections, and remittances during international trade settlement. These include issuance fees, advising fees, negotiation fees, payment fees, cable charges, postage, confirmation fees, etc. They are commonly used in payment methods such as letters of credit, collections, and telegraphic transfers. Note: Buyers and sellers should clearly specify in the contract which party bears the bank charges, such as 'all bank charges are for the account of the buyer' or 'charges outside the issuing bank are for the account of the seller'; otherwise, disputes may arise. Rates vary significantly among banks and should be confirmed in advance. Some charges may be deducted by intermediary banks, reducing the amount received. Unlike 'commission' or 'discount', bank charges are the cost of bank services, not a commercial concession. They also differ from 'interest', which is the cost of funds occupation, while bank charges are service fees. In letter of credit transactions, the clause 'ALL BANKING CHARGES OUTSIDE ISSUING BANK ARE FOR ACCOUNT OF BENEFICIARY' is common, and sellers need to calculate costs accordingly.