documentary credit
Definition
International trade procedure in which the credit worthiness of an importer is substituted by the guaranty of a bank for a specific transaction. Under documentary credit arrangement (also called letter of credit arrangement) a bank (usually in the importer's country) undertakes to pay for a shipment, provided the exporter submits the required documents (such as a clean bill of lading, certificate of insurance, certificate of origin) within a specified period. In the US this arrangement is called 'commercial letter of credit.'
documentary credit is in the Banking, Commerce & Finance and International Trade & Relations subjects.
documentary credit appears in the definitions of the following terms:
open credit,
acceptance,
straight credit,
negotiating bank,
documentary collection,
reasonable care in examining documents,
autonomy principle,
commercial letter of credit,
negotiation credit,
cash cover
and
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