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Use a letter of credit when importing or exporting
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A letter of credit (or documentary credit) is the most secure and
convenient payment method for international transactions. It is a document
issued by a bank guaranteeing an importer’s ability to pay for goods or
services. A bank issues a letter of credit on behalf of an importer,
authorising the exporter to obtain payment within a specified timeframe
provided the conditions outlined in the letter of credit are met. The letter of
credit acts like an insurance contract for the importer and exporter -
virtually eliminating the credit risk for both parties, while at the same time
reducing payment delays. Types of letters of creditHow it works (using a confirmed letter of
credit)Common errors to avoid
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