Export Letter of Credit

An Export Letter of Credit is a bank-issued document guaranteeing payment to an exporter once the exporter meets the terms specified.

Banks like JPMorgan Chase, HSBC, and Citibank commonly issue these documents. They ensure that exporters receive payments from importers.

Documents required include:

• Bill of Lading
• Commercial Invoice
• Packing List
• Certificate of Origin
• Insurance Certificate

Specific terms often include delivery deadlines and quality standards. Payment mechanisms include Sight and Usance Letters of Credit.

In this financial instrument:

• The exporter is the beneficiary.
• The importer is the applicant.
• The issuing bank scrutinizes the fulfillment of terms.