Thursday, 2 November 2017


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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