Documents Required for Letter of Credit
The Letter of Credit (L/C) is an instrument to provide buyer and seller as much as possible security about the delivery and the payment for it. To receive payment, an exporter or shipper must present the documents required by the Letter of Credit. Typically the letter of credit will request an original bill of lading as the use of a title document such as this is critical to the functioning of the Letter of Credit. However, the list and form of documents is open to negotiation and might contain requirements to present documents issued by a neutral third-party evidencing the quality of the goods shipped, or their place of origin or place. Typical types of documents in such contracts might include:
The seller or exporter should note that negotiating bank’s which receives and examines the documents’ ability to pay against documents submitted by the seller under a given L/C, depends entirely on the strict compliance of these documents with the terms and conditions of the L/C and the provisions contained in the rules for L/Cs which is UCP600.
