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General Information

Letters of Credit

A letter of credit is a transaction involving payment against delivery. We will show you the various stages.

Procedure for a Letter of Credit

Opening

Upon opening a letter of credit the bank undertakes an obligation on behalf of the buyer to pay the seller. To this end the buyer must have sufficient assets/credit with the issuing bank.

Credit Suisse provides a special order form to facilitate the formulation of the order for the letter of credit.

Notification/confirmation

Upon receipt of the notification the bank sends the letter of credit to the seller without incurring any liability for its part. However, the bank must take reasonable care to check that the credit appears authentic.

When confirmation is requested the bank sends the letter of credit to the seller with its own promise to pay.

Amendement

If the wording of the letter of credit does not reflect the requirements of both parties the letter of credit can be adjusted by means of an amendment.

Using and Honoring Letters of Credit

Before they can be submitted, all required documents must be available and must comply with the UCP (Uniform Customs and Practice for Documentary Credits) and documentary credit terms and conditions, and be consistent amongst each other.

Credit Suisse provides a special remittance form (DE) for the seller's convenience to facilitate the submission of the documents.

If the document submission is compliant with the letter of credit, it is honored in accordance with the conditions set out in the letter of credit.

 

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