It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking.
Methods of Payment
Standard methods of payment are available for export sales to Ireland through a well-developed banking sector. Competition, to a large degree, has required the use of liberal financing, as opposed to requiring payment on a letter of credit or cash basis. Letters of credit can be used initially for new accounts with more liberal terms granted if justified by volume and customer reliability. Knowledge of industry practice and the customer is generally the prime consideration in deciding whether to use sight drafts, time drafts, or open accounts. Usual terms of sale are payment within 30 to 90 days after delivery, varying with the commodity and the credit standing of the purchaser.
The accepted and examined credit ratings throughout the world are generated by three main agencies—Standard & Poor’s, Moody’s, and Fitch Ratings. All major credit cards including Visa and MasterCard are widely accepted; however American Express (AmEx) is not as readily received as in the U.S. Vendors may require additional identification such as a passport. Debit cards including Maestro, Visa Debit and MasterCard debit are accepted. For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
A very sophisticated banking environment exists which offers many sources of financing to organizations doing business in Ireland. In broad terms, the sources of financing can be classified into two groups: a) financing and financial services available directly from banks, and other financial institutions, and b) financing available through financial markets, such as the Irish Stock Exchange (Euronext).
The Irish domestic banking sector, like many worldwide, came under intense pressure in 2007 and 2008 following the collapse of Ireland’s construction industry and an end to Ireland’s property boom. It was subsequently determined that several of Ireland’s financial lenders (entirely commercially owned), were severely under-capitalized and required government bailouts to survive. The creation of the National Asset Management Agency (NAMA) at https://www.nama.ie/ supported the banking industry and removed severely impaired property loans (granted on inflated asset prices) from the main institutions. As a result the government effectively controls Allied Irish Banks; has recapitalized Permanent TSB; Anglo Irish Bank, Irish Nationwide Building Society and Educational Building Society are resolved and no longer exist, while Bank of Ireland succeeded to remain non-nationalized by realizing capital from the sale of non-essential portfolios as well as targeted burden-sharing with some bondholders.
The role of the Central Bank of Ireland (CBI) at https://www.centralbank.ie/ traditionally has been similar to that of central banks in other developed countries. The CBI is responsible for both central banking and financial regulation; and since 1998 in discharging its function as part of the European System of Central Banks in the Eurozone. A new CBI structure formed in 2010 which replaced the three previously related entities, the Central Bank and the Financial Services Authority of Ireland and the Financial Regulator. The CBI is responsible for the stability of Ireland’s financial system and for ensuring proper and effective regulation of financial institutions and markets. It oversees and regulates Ireland’s domestic banks; and international and investment banking operations located within the International Financial Services Center (IFSC).
All banks operating in Ireland must be licensed by the CBI. Retail banks in Ireland provide all general banking services, including comprehensive current account services and mortgage facilities. Retail banks are subsidiaries and affiliates of the main clearing banks which tend to concentrate on specific types of banking business; examples include wholesale and corporate banking, installment credit and leasing; and capital market activities. International and investment banking; and other financial services are carried out by banks which operate in the International Financial Services Center (IFSC) at https://www.ifsc.ie/.
Foreign Exchange Controls
Ireland is a member of the European Union (EU) and the European Monetary System (EMS). Commercial transactions and payment terms therefore reflect common Western practices. Primary import payment considerations are determined by the financial reputation of an individual customer combined with competitive considerations. There are no commercial foreign-exchange limitations or unusual regulations. Additionally, there are no restrictions on inward investment, foreign trading, or the repatriation of capital and profits of American firms based in Ireland.
The Irish importer can arrange import financing through a local branch bank manager. Experienced importers respect overseas vendor’s payment terms. The domestic market operates quite differently, with trade customers taking cash discounts and paying up to 90 or even 180 days after delivery. Occasionally, new importers attempt to apply domestic practices to the international marketplace.
US Banks & Local Correspondent Banks
Listings of all financial institutions licensed by the Central Bank of Ireland are searchable here (http://registers.centralbank.ie/FirmSearchPage.aspx). Major Irish banks can facilitate Exim Bank programs in Ireland.