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HMRC internal manual

Guidance on the Audit of Customs Values

Assists: confirming commission

Confirming commission is a fee paid by exporters to an intermediary to protect themselves against the financial risk of non-payment or insolvency on the part of the buyer. However, in some cases the buyer will undertake the arrangement on his own initiative to ensure the conclusion of the sale. The confirming commission may be denoted by other names in various countries.

The intermediary who will confirm or guarantee payment for the goods by the buyer is usually a bank but could also be a government agency, insurance company or a specialised commercial company.

The service is frequently used when the seller lacks confidence in the bank which issues a letter of credit on behalf of the buyer. The seller therefore requests an intermediary, usually a bank in his own country, to guarantee the commercial risk of non payment by the buyer’s bank (see also WCO EN 5.1).