Also known as: Documentary Credit
Payment instrument issued by a bank at the importer's request, guaranteeing the exporter payment if documentary conditions are met. The primary payment mechanism in international trade.
The issuing bank commits to paying the exporter upon presentation of required documents: invoice, BL, certificate of origin, packing list, etc. Governed by ICC UCP 600.
Documentary Collection
Payment mechanism where the exporter's bank sends shipping documents to the importer's bank, releasing them against payment (D/P) or acceptance (D/A). Cheaper than a letter of credit.
DocumentsBill of Lading (Ocean)
Maritime transport document serving as a contract of carriage, receipt of goods, and document of title.
DocumentsCommercial Invoice
Document issued by the seller/exporter describing the goods sold, their price, terms of sale, and details of the parties involved.
LogisticsFCA (Free Carrier)
An Incoterm where the seller delivers goods to the carrier nominated by the buyer at a named place, transferring risk and responsibility at that point.