Citi Transaction Services Latin America and Mexico

What is cross-border trade settlement in RMB

Citi RMB Letters of Credit Importers/ExportersOptimize international trade with Chinese exporters and importers through RMB denominated Letters of Credit.

While trade flows between China and Latin America are increasingly diversi�ed, the majority of trading activities between both partners utilized Letters of Credits (LC) as a method to settle trading transactions. Through the internationalization of the RMB and the development of Citi’s cross-border RMB settlement and trade services solutions, companies in Latin America can settle their Chinese trade transactions through in RMB denominated LCs.

The SolutionThe RMB LC will allow companies in Latin America to issue, receive and settle RMB denomi-nated LCs with their Chinese trading partners while opening new alternative solutions for trade �nancing, trade proccessing and risk mitigation.

Importers:By issuing a RMB LC to support trade with your Chinese partners, your company can settleimport payments directly in RMB while mitigating the risk associated with internationaltrade.

Exporters:By offering your Chinese clients the alternative of RMB denominated commercial invoicesand LC terms, your company will be able to gain a competitive advantage and increase sales and improve client relationships in one of the fastest growing markets.

BenefitsBy offering your partners in China the option of securing your trade transaction witha letter of credit denominated in RMB you have the opportunity to:

• Improve commercial terms and optimize cost of goods sold• Increase business partners and improve supplier relationships in China• Optimize working capital through an alternative settlement currency and diversify foreign exchange risk

Market Trends• 2010: The People’s Republic of China launched the internationalization of their currency, the Renminbi (RMB) allowing it to be used for settling international trade transac-tions between China and the rest of the world.

• RMB 2.58 trillion in crossborder RMB settlement in2011.

• 95 countries settle tradetransactions in RMB in 2011.• Latin America trade activity with China grows 40% between 2009 and 2010.

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Transaction Services

How it worksIssuing RMB LC is as straightforward as issuing your traditional LCs.

In addition, we also offer fi�nancing, con�firmation, bill discounting and other Trade services - all aimed at maximizing your operational efficiency and improving your bottom line.

Importer Exporter

Sign Contract withinvoice terms in RMB

1

Apply for RMB LC Citi issues RMBLC

2 Advise LC3

Ship the Goods4

Submit Documents

5

Send Documents6

Documents presented and found in order. Initiate payments to Exporter’s bank per credit instructions. Settlement is executed in directly in RMB.

7

Latin America (Issuing Bank)

Exporter’s Bank (China, Hong Kong or Singapore)