A letter of credit is a document issued to an exporter by the carrier transporting the merchandise;it serves as a receipt,a contract and a document title.

Question

Quizplus · Accepted Answer

A letter of credit is actually issued by a bank or financial institution, and not the carrier transporting the merchandise. The purpose of a letter of credit is to ensure payment to the exporter, and it serves as a guarantee from the bank that the funds will be transferred to the exporter once the terms and conditions of the letter of credit have been met.

A Letter of Credit Is a Document Issued to an Exporter