Letters of credit

Letter of credit (L/C) is the document issued by the bank (bank-issuer) upon the request of the buyer of goods or services. Under such document the bank takes an obligation to pay the amount, provided in the L/C to the seller (L/C beneficiary), when the latter provides the bank with the documents that correspond all the regulations of L/C.

Letters of credit guarantee to the seller the payment for the goods supplied, works performed or services rendered on condition that within the term provided in the L/C the seller submits to the bank the documents that correspond all the regulations of L/C in accordance to the publication No.500 of 1993 of Uniform Customs and Practice for Documentary Credits by the International Chamber of Commerce.

The letter of credit may be settled:

• by the straight payment (after the documents are received and inspected by the bank indicated)
• by the payment within the term provided in the L/C (deferred payment L/C)
• after bank accepts the promissory note from the beneficiary
• when the bank-announcer negotiates the documents of the L/C.

Please refer to our Settlements Department to get more information related.