The bank promises to pay on behalf of the importer when a bank is used as a third party in international transactions.

Name: The bank promises to pay on behalf of the importer when a bank is used as a third party in international transactions.
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Question

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When trading with a bank as a third-party, the importer obtains the bank's promise to pay on the importer's behalf at first. Then, the bank promises the exporter to pay on behalf of the importer. The exporter ships the items after this.

The Bank Promises to Pay on Behalf of the Importer