A letter of credit (LC) is a written document submitted by the importer's bank on behalf of the importer。By using a letter of credit, an exporter can ensure that the issuing bank will pay the exporter for international trade。The importer shall be the applicant and the exporter shall be the beneficiary。The issuing bank guarantees payment of the credit for the above amount on the agreed schedule and specified documents。
The basic principle of an issuing bank's L/C is that the issuing bank pays only on the documents presented and does not have to personally transport the goods。The bank has no reason to refuse payment if the documents provided conform to the terms of the credit。
In trade, a letter of credit is a commonly used form of payment, and the issuing bank may act on the request and instructions of the applicant (importer) or in its own name。Under a L/C arrangement, the issuing bank may pay the beneficiary (i.e. the exporter) (or in order of the payer)。In addition, the issuing bank may also accept the exporter's draft or money order。The issuing bank may also authorize a recommending bank or nominated bank to pay or accept a draft。 Import L/C is a payment promise issued by a bank to a foreign exporter at the request of a domestic importer, promising to fulfill the payment obligation to the exporter when the terms stipulated in the L/C are met。Canny will take care of trade finance and risks in your import process。