- as an importer, you will pay the goods provided that the documents presented comply with the terms and conditions of the documentary credit, such documents being relevant to the contractual provisions and, therefore, evidencing that the goods have been shipped within the conditions and terms preset forth within the commercial contract
- Documentary credits are subject to the Uniform Customs and Practice for Documentary Credits (commonly called “UCP”), ICC Publication no.600/2007 Revision - a set of rules used in handling of documentary credits, as well as an internationally accepted standard for production of various documents such as invoice, transport and insurance documents.
Key points for the importer:
- covers the associated risk (commercial and country risk) derived from a commercial relationship with a new exporter and/or a brittle relationship
- strong negotiating position
- once the documentary credit is issued, you are ensured that the terms and conditions of the commercial contract or any other agreement will be met by the exporter