To constitute a true letter of credit transaction, the issuing bank must receive a fee or other valid business consideration for issuing the L/C.

Question

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According to international trade rules under the Uniform Customs and Practice for Documentary Credits (UCP 600), the issuing bank must receive a fee or other valid consideration for issuing a letter of credit. This fee is usually paid by the applicant (buyer) or may be included in the price of the goods or services being traded.

To Constitute a True Letter of Credit Transaction, the Issuing