§ Mr. Robert Taylor
asked the Secretary of State for Trade for how long Ghanaian banks have adopted the policy of opening letters of credit in £ sterling in favour of United Kingdom exporters containing a clause providing that the documents submitted thereon will be released to the buyer against a deposit of local currency after which £ sterling will be remitted as and when it becomes available; whether any other countries follow this procedure; what is the attitude of the Export Credits Guarantee Department; and if he will make a statement
§ Mr. Meacher
I understand that some Ghanaian commercial banks have been opening such "claused" letters of credit since 1977. This procedure is unusual and ECGD is not aware of banks in other countries adopting this practice. In Ghana it probably stems from the delays which have occurred in the provision of foreign exchange to meet commercial transactions. ECGD understands that normal letters of credit are now obtainable in Ghana and therefore cover is restricted to these and is not currently available for transactions involving the letters of credit of the type referred to here.