It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking.
Methods of Payment
In Chile, most of the payments sent to foreign suppliers are submitted using irrevocable letters of credit from Chilean commercial banks. This is done across industries, with no lengthy delays in the remittance of foreign currency, most banks in Chile have Foreign Trade divisions that specialize in international payments and collections. Payments are made upon receipt of notice of shipment of goods. Other methods of payment to suppliers include cash against documents and open account. The credit insurance industry it is developed in the country and major private agencies such as Mapfre, Continental, HDI, Solunion, and Coface have local offices in Santiago. The U.S. Export-Import Bank (EXIM) also offers credit insurance products to U.S. exporters.
Chile’s banking system offers many of the asset and liability products available in international markets. Foreign trade financing and money exchange operations are particularly well developed and efficient compared to the rest of Latin America.
Chile’s Commission for the Financial Market, an agency under the Ministry of Finance, regulates the financial sector, this public entity oversees and coordinates the action of other financial-related agencies. Chilean Pensions Superintendency is the technical authority responsible for the supervision and control of the institutions involved in the Chilean Pension System. Chile’s Bureau of Consumer Protection is Sernac protects consumers in Chile in a variety of industries, including financial services. For all credit requests in the country, Sernac mandates that quotations must include the CAE index (Carga Anual Equivalente, or Annual Equivalent Cost) to facilitate credit comparison to end users.
Chile’s Central Bank is autonomous from the government in conducting monetary policy and regulating foreign capital movements, its mission is the stability of the currency, and to keep inflation low and stable over time. The bank also regulates the amount of currency and credit in circulation.
Some Chilean banks with direct presence in the United States, including Banco de Crédito e Inversiones, also known as BCI, which controls City National Bank in the U.S. Banco Estado, Banco de Chile, and Banco Itaú also have representative offices in New York.
U.S. banks operating in Chile, including Wells Fargo and Bank of America, concentrate on corporate lending for multinationals and capital market activities, although Banco de Chile (a Citibank joint venture) and Santander are active in retail banking. There are a few business development offices of U.S. commercial banks in Chile offering U.S. Export-Import Bank insurance programs.
Western Union is also present in Chile. They offer wire transfers and payment through their website or app.
Foreign Exchange Controls
Chile has no restrictions on incoming and outgoing foreign capital. Reserve requirements for external capital, and the prior authorization requirement to enter funds associated with external loans, investment, working capital, bonds and ADRs have been eliminated. Limitations on capital and profit repatriation were also eliminated. Foreign trade finance operations (both import and export) are allowed to perform their foreign exchange transactions in the open market. Foreign exchange operations are relatively active and efficient in Chile. As a rule, currency may be freely traded in two markets: the informal and the interbank market (formal). Prior to receiving authorization, Chile’s Central Bank requires confirmation that the trade finance transactions, foreign loans, capital flows, and profit repatriation will be executed through a commercial bank (formal market). Foreigners entering Chile, must declare at Customs if they are bringing more than $10,000 dollars.
U.S. Banks and Local Correspondent Banks
· JP Morgan Chase, +56 2 2425 5100
· Wells Fargo, +56 2 2365 9733