Under a letter of credit, the exporter will not ship the goods until the buyer has remitted payment to the exporter.

Question

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Under a letter of credit, the exporter ships the goods to the buyer and the payment is made by the buyer’s bank to the exporter’s bank, provided all the terms and conditions of the letter of credit are met. The exporter is assured of payment as long as it complies with the terms of the letter of credit.

Under a Letter of Credit, the Exporter Will Not Ship