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ELHASHEMYA
2002
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الهاشمية للخدمات الملاحية

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ALHASHEMYA · EST. 2002

Home/Maritime Glossary/Letter of Credit (L/C)

Letter of Credit (L/C)

A bank guarantee ensuring the seller is paid if compliant documents are presented.

Letter of Credit (L/C)

Finance

A bank guarantee ensuring the seller is paid if compliant documents are presented.

Detailed explanation

The L/C is the gold guarantee in international trade.

Flow

  • •Importer requests L/C, 2. Bank issues to exporter, 3. Exporter ships and presents documents, 4. Bank pays if compliant, 5. Importer collects documents

Types

  • •Revocable vs irrevocable, confirmed, transferable, at sight

Always read L/C terms precisely — any discrepancy rejects documents.

Related terms

Bill of Lading (B/L)

A legal document issued by the carrier confirming receipt of cargo for shipment and defining the terms of transport. It serves as proof of cargo ownership.

Commercial Invoice

A document issued by the seller stating the cargo's value, description, and prices — used in customs clearance.

Certificate of Origin

An official certificate proving the cargo originates from a specific country — used for tariff preferences.

Back to Maritime Glossary

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