LETTER OF CREDIT (LC)

DOCUMENTARY CREDIT, LETTER OF CREDIT (LC)

PROCEDURE:

To regulate the contract by documentary credit in the context of a commercial transaction implies different phases:

Define the contract between the seller and the buyer, dates and documents:
• commercial invoice;
• transport documents (Bill of lading, AWB, CMR);
• document / insurance policy;
• packing list;
• weight list;
• certificate of origin;
• movement certificate ( EUR1 , ATR1 for Turkey).

– Emission by assignment of the buyer to his bank

– Check of payer coverage conditions by the bank

– Emission of the Documentary Credit

– Receiving and relevant communication by the advising bank

– Check of beneficiary conditions : i.e on receipt of the documentary credit notified by the advising bank, the seller controls if it has been issued according to trade agreements with the buyer

– Production, goods shipment

– Documents delivering and use of credit: after the shipment, the seller sets up all the documents and delivers within the deadlines set out

– Check of documentary compliance

– Withdrawal of the goods

Pay attention to:

- Maritime transport documents;
- Insurance and coverage documents;
- International bank guarantees;
- Stand-by letter of credit;
- Pathology on fist demand guarantees: emergency measures ex art. 700 c.p.c., illicit liquidation, liquidation in fraud.

LINKS:

- External trade documents
- Documentary credit and Stand-by letter of credit
- First demand guarantee

FOR FURTHER INFORMATION ABOUT A DOCUMENTARY CREDIT PROCEDURE OR FOR A FREE CONSULTATION YOU CAN WRITE A QUESTION ON THE SECTION THE EXPERT ANSWERS OR CONTACT US VIA E-MAIL ON THE LINK BELOW