Letter of Credit
Letter of Credit
(OP)
Good day to all.
Can someone be kind to explain me what is a "Letter of Credit"?
I searched on the internet but it doesn't appears clearly.
I mean, if someone can put an example about how does it work, payment, time, etc. I'm new on this.
Regards.
Can someone be kind to explain me what is a "Letter of Credit"?
I searched on the internet but it doesn't appears clearly.
I mean, if someone can put an example about how does it work, payment, time, etc. I'm new on this.
Regards.





RE: Letter of Credit
Good luck,
Latexman
To a ChE, the glass is always full - 1/2 air and 1/2 water.
RE: Letter of Credit
B.E.
You are judged not by what you know, but by what you can do.
RE: Letter of Credit
We used standard phrases in our international bids like "contract will only be effective after buyers bank issues a Confirmed Irrevocable Letter of Credit written in a form acceptable to Seller, payment in Sterling.
Payment in sterling, or US dollars, because you may not want payment in sellers local currency. Their government might impose exchange controls, so you cannot get the money!
Other points to note, it works on documentation, not the goods. So you want to have the money on a clearly defined set of documents, eg bill of lading, inspectors certificate etc.
If you are shipping several items, you may want payment on each shipment, not the whole. You may have a contract to supply 100 compressor sets, then find you cannot get them all on one ship....