We’re exporting goods, what is an irrevocable documentary letter of credit?
Last Updated: 21 Jun 2016
An irrevocable documentary letter of credit can provide a high level of protection when doing business overseas. It is an irrevocable undertaking issued by the importer’s bank to support the underlying commercial trading activity with an exporter (seller).
As long as the exporter’s documents completely satisfy the terms of the letter of credit, the importers’ bank guarantees payment. Exporters may also request, by agreement, a letter of credit confirmation. This means the importer’s issuing bank and associated country risks are guaranteed - usually by the exporter’s bank – and is called without recourse finance.
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