Certification and declaration by the seller/exporter that goods in a particular export shipment are wholly obtained, produced, manufactured or processed in a particular country.The buying country’s embassy-certified (or legalized) Invoice and/or documents.Phytosanitary or Health Certification of product that is being imported.Proof that the products meet the desired qualityĪdditionally, the buyer's country may have statutory requirements like:.(same as bullet point number 9 given below) Proof of value of goods being imported.įurthermore, the buyer may also want the following:.So think as a buyer/importer when looking for the logic behind the kind of documents that typically get requested in a LC (or documentary credit) transaction.įrom a buyers' perspective, the buyer would absolutely need the following: It is evident that the buyer generally requests the documents from a seller in a LC transaction. What documents are generally requested in a letter of credit transaction?
Since these complying documents submitted by the seller to the bank are the trigger for the seller to get paid, it makes them the most important component of a letter of credit transaction in international trade. The bank also checks the instructions to ensure that the documents submitted by the seller contain no errors. In order to pay the seller, once the bank receives the documents from the seller, the bank examines the submitted documents to see if they comply with the documentary credit terms that were set by the buyer and the governing rules of the LC. What that means is that in a LC transaction, the payment from a bank to the seller/exporter is conditional upon the ability of the seller to generate the documents that are requested by the buyer/importer in the letter of credit. The performance of the seller/exporter is tied to the documents requested in the letter of credit. This is because, in a letter of credit transaction, documents are its driving force. Nestled in the word 'documentary' is the word 'document'. Documents Requested in a Letter of Credit Transaction What are the Commonly Requested Documents in a Letter of Credit Transaction?Ī Letter of Credit is also known as 'Documentary Credit'.
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