Import Letters of Credit for Nigeria
Import Letters of Credit for Nigeria — 2025 Playbook (Banks, Docs, Timelines)
If you’re buying into Nigeria, you already know the drill: extra checks, picky LC wording, and sellers who won’t ship without confirmation. This page cuts the noise. Here’s the process that clears compliance and gets cargo released on time.
Who this page is for
- Nigerian importers who need a workable LC with predictable timing.
- Exporters selling to Nigeria who want bankable wording and, if needed, a confirmed LC.
- Intermediaries stuck between a seller’s demands and a bank’s compliance team.
Issuance flow that actually clears
- Form M setup: register the import on the portal with the authorized dealer bank. Match the sales contract (Incoterms, HS codes, unit prices). Sloppy inputs slow everything.
- PAAR: dealer bank submits to Customs; PAAR is issued after risk checks. No PAAR, no clean LC issuance for most goods.
- LC draft: build LC terms to mirror the contract and Form M. Define shipment window, ports, partials/transshipment, insurance responsibility, and documents.
- Issuance: authorized dealer bank issues the LC. Name the advising bank the exporter trusts.
- Confirmation (if required): add a first-class confirming bank when the exporter won’t take the issuing bank/country risk.
- Presentation & payment: exporter ships, presents documents; paying/confirming bank honors on sight/usance if documents comply.
Cost & timeline bands (indicative)
| Item | Typical range | What drives it |
|---|---|---|
| LC issuance fee | ~0.75%–2.00% p.a. (pro-rated) | tenor, size, bank, sector |
| Confirmation fee (if added) | ~0.75%–3.00% p.a. | country/bank risk, tenor, advising bank appetite |
| Advising / SWIFT / courier | bank fixed charges per bank | number of banks in the chain |
| Timeline (clean file) | Form M + PAAR: ~3–10 biz days; LC issuance: ~3–10; confirmation add-on: +2–5 | KYC, sanctions checks, wording fixes, bank queues |
Numbers are ranges. Complex KYC, regulated goods, or extra confirmations push longer.
Documents map (build it once, stop rework)
- Contract & Proforma: items, HS codes, Incoterms, shipment window, payment terms, partials/transshipment rules.
- Form M package: Proforma, product specs, IDs and company docs, where required product certificates (e.g., SON/NAFDAC where applicable), and any import permits tied to the HS code.
- LC wording pack: exact document list: commercial invoice, packing list, clean on-board B/L or AWB, certificate of origin, insurance certificate (if CIF/CIP), inspection where applicable.
- Compliance: sanctions/AML screenings, vessel and port checks if sensitive. Keep names consistent across all docs.
When to add confirmation
- Exporter’s bank won’t accept the issuing bank/country risk.
- Contract requires a first-class confirming bank.
- Shipment is time-critical and seller needs sight certainty.
If you need buyer tenor but the seller wants sight cash, consider a UPAS LC: seller gets paid at sight; importer repays the bank at 30–180 days. You still need clean wording and a bank willing to fund the usance period.
Common failure points
- Form M details don’t match the LC draft (unit prices, HS code, Incoterms).
- LC asks for documents that don’t exist in the trade (impossible conditions).
- Confirmation requested late; confirming bank wants wording changes after issuance.
- Names/addresses inconsistent across Proforma, LC, and documents.
- Ignoring inspection or product certifications where the HS code requires them.
How we help
We scope the trade, draft bankable LC wording, line up an advising/confirming bank the exporter will accept, and coordinate with your authorized dealer bank so Form M, PAAR, and the LC all match. If usance is needed, we structure UPAS or discounting with clear costs up front. No guesswork, no dead ends.
Start LC placement for Nigeria
Send the contract, Proforma, target ship window, and whether the seller asks for confirmation. We’ll map the bank route and timelines.
Start LC Placement (Nigeria)FAQ
Do I need Form M and PAAR for every LC
For most goods, yes. Your dealer bank and Customs will require them before a clean issuance and clearance.
Can I issue in EUR instead of USD
Usually yes if all parties agree, but bank appetite and pricing can differ by currency.
When is UPAS the right call
When the exporter wants sight payment and you need tenor to sell or process goods. It still needs a bank willing to fund the usance period.
Why would a seller insist on confirmation
To remove issuing bank/country risk. It also locks payment timing if documents comply.
How fast can this move
Clean files can cycle in a couple of weeks. Messy KYC, wording changes, or extra certifications push longer.
This page is informational. Any LC or confirmation depends on bank credit approval, KYC/AML, sanctions checks, product regulations, and final wording consistent with the contract and trade rules.
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