Page 125 - eBook: EXIM for Beginner

Irrevocable Letter Of Credit

• According to the latest letter of credit rules (UCP 600) all credits

are irrevocable. Letter of credit is a conditional payment obligation

of the issuing bank and the beneficiary always has to make a

complying presentation in order to receive the payment.

• An irrevocable letter of credit is an agreement between a buyer

(often an importer) and the buyer's bank. The bank agrees to pay

the seller (the exporter) as soon as certain conditions are met.

Because it is irrevocable, the terms of the letter cannot be changed

without the agreement of everyone involved.