Chapter 12 - GENERAL - DOCUMENTARY CREDIT
UCP600
governs the operation of Documentary Credit or Letter of Credit.
An irrevocable undertaking by which the issuing bank
guarantees payment to the beneficiary or beneficiary’s Bank, that if documents
presented to them by the beneficiary or beneficiary’s Bank complying with the
terms and conditions of the letter of credit.
Documentary Credits - Sight - Documents against Payment (D/P)
Settlement of payments through the medium
of Documentary Credit involves dispatch of goods by the seller to the Bank
issuing the Documentary Credit (the issuing Bank) and forwarding the documents
to the issuing Bank through his bank for obtaining payment from the buyer.
Sight payment means that payment should be
made when the Document presentation is seen or sighted. It also means that
payment should be made on demand.
Documentary Credits -Usance - Documents against Acceptance
(D/A)
Settlement of payments through the medium of
Documentary Credit involves dispatch of goods by the seller to the Bank issuing
the Documentary Credit (the Issuing Bank) and forwarding the documents to the
Issuing Bank through his bank for obtaining payment from the buyer.
Usance payment means that payment should be
made in a Future determined date.
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