Commercial Documentary Credits.

These are the type of letters of credit that used in commercial purposes and mostly subject to the latest version of UCP (Uniform Customs and Practice for Documentary Credits). They can be divided into two sub-categories: export letters of credit and import letters of credit. Actually, these categorizations are only made according to which side you are standing at the transaction because an export letter of credit is also an import letter of credit for the counterpart.

Export Letters of Credits.

• Risk evaluation prior to LC openings
• Consulting exporters through LC opening negotiations
• Risk evaluation of existing letters of credit for risky points
• Consulting exporters preparing the documents for complying presentation

As per our understanding the most critical stages of LC operations are the first two ones above. Risk evaluation of your customer and negotiation LC conditions. If these two steps are done professionally, remaining parts of the job can be done without too much hustle. The opposite is also true. If the first two stages are not done quite in a professional manner, it is highly probable that a costly problem can occur later on the LC process.

Import Letters of Credits.

• Risk evaluation prior to LC openings
• Consulting importers through LC opening negotiations
• Consulting importers during the LC process

For importers, main aim should be to construct an LC which will protect their rights against certain risks. As a result, risk evaluation prior to LC openings and negotiations with the exporters are the most critical stages for importers. If these two steps are not done correctly, there is not too much thing left that can be done to prevent any unwanted situation to occur from the importers view.

Standby Letters of Credit.

Standby letters of credit are issued mostly by banks, on behalf of a customer to provide assurances of his ability to perform under the terms of a contract which is exist between the beneficiary of the standby letter of credit. They had been created by US banks in order to circumvent a past rule that prohibited US credit institutions from assuming guarantee obligations in relation to third parties. They can be opened either subject to latest verison of UCP (UCP 600) or ISP. ISP98 (International Standby Practices - 1998 edition) is the unique rules for Standby letters of credit published by ICC.