documentary letter of credit

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documentary letter of credit

Used somewhat like cashier's checks,but with more safeguards.The typical documentary letter of credit will allow payment to a vendor upon the vendor's presentation of the letter and certain documents, such as proof the goods were placed on board a vessel for shipment to the United States.

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Unfortunately, many bankers who--as a standard practice--will not issue without requiring an OBL as evidentiary documentation, will, at the same time, counsel their applicant clients that it is perfectly fine to issue a documentary LC in "F" term or "E" term format--which essentially does violence to the intention of the documentary Letter of Credit in the first place.

Exporters must ensure coordination of Incoterms and documentary requirements for LC payment

Ask this new customer to arrange for its bank to issue a documentary letter of credit.

Ideas for extending credit to a new business

Trade creditors seeking protection from the credit risk of a Chapter 11 debtor or financially troubled customer could push for third party protection, such as the posting of a standby or documentary letter of credit.

The Kmart trade lien program--is it what it is cracked up to be? (Business Law)

In this regard, both EX-IM Bank and SBA often require the export sale to be covered by a documentary letter of credit or export credit insurance, particularly when buyers reside in a developing country.