DOCUMENTARY LETTER OF CREDIT
A documentary Letter of Credit (LC) is a written undertaking given by a bank on behalf of a client (the importer) to pay the beneficiary a given sum of money, providing that the exporter presents documents that comply with the terms laid down in the Letter of Credit.
LCs are intended for all legal entities, regardless of the type of business registration, that are involved in export and import, and for other companies and entities that require this service and that hold an account with ProCredit Bank.
A documentary Letter of Credit provides security to all the parties involved in an international transaction:
- The buyer is confident that the payment will be received against the documentary Letter of Credit only once the seller has submitted all the required documents related to the Letter of Credit within the agreed timeframe.
- The seller is confident that by dispatching the relevant commercial documents stated in the Letter of Credit, and provided that all the requirements laid down under the Letter of Credit have been met, that they will be able to charge the counter-value of the exported goods, i.e. the service rendered, since the payment is guaranteed by the bank that opened the Letter of Credit and/or confirmed the Letter of Credit.
Prior to issuing a Letter of Credit, the buyer and seller should agree on the following:
- Conditions relating to the payment of the documentary Letter of Credit, as well as a transportation clause
- The type of Letter of Credit, as well as required documents (invoice, packing list, transportation document, certificate of origin, etc.)
- Issuance and expiry dates of the Letter of Credit
We offer the following types of Letter of Credit:
- Irrevocable Letter of Credit
- Non-transferable Letter of Credit
- Unconfirmed Letter of Credit
- Confirmed Letter of Credit
- Sight Letter of Credit
- Deferred payment Letter of Credit