Opening a Documentary Credit
•
Introduction
•
The success or failure of a documentary credit transaction
can turn upon the wording of the documentary credit itself.
As such, the buyer (whose responsibility it is to open the
credit) should adhere to the greatest extent possible to the
terms and conditions of the original contractual agreement,
keeping the specifications clear
and concise and as simple
as possible.
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Opening a Documentary Credit
•
Refer to Documents
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The buyer's instructions to the issuing bank should be given
in clear, professional wording, and should pertain only to
documentation, not to the goods themselves. It is very
important to demand documents
in the credit that clearly
reflect the agreements reached.
•
EXAMPLE 1: Require confirmation that goods are shipped
by Conference vessel
no more than twenty years old, rather
than that the goods be shipped by Conference vessel no
more than twenty years old.
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