The Documentary Credit is a very common payment method with countries or clients/ suppliers with which there is little commercial confidence or trust. The Documentary Credit or Letter of Credit (L/C) is the best way to protect the interests of all parties involved.
The Bank (Issuing Bank) acts at the request of a client (Ordering Party), and is obliged to pay against the required documents, as long as these have fulfilled the terms and conditions of the Credit.
It´s very important to take into account certain aspects related directly with transport and customs when issuing or accepting a Letter of Credit, since it can be risky to accept conditions that can´t be fulfilled.
At Ibercóndor we advise you on these matters.