An international importer agrees to purchase product from a domestic exporter.
The exporter requests the importer to provide payment via a Letter of Credit.

The importer asks their bank to present a Letter of Credit to the domestic bank selected by the exporter. This document ensures payment to the exporter provided the exporter delivers the product.

The product is shipped.

The documents are delivered to an advising bank. If the advising bank finds a discrepancy, the documents are returned to the exporter for correction. The documents are resubmitted as many times as necessary until they are compliant with the terms of the LC.

The compliant documents are forwarded to the importer¹s bank and the bank confirms that the shipment was received.

When the importer¹s bank determines that the transaction is complete the importer¹s bank sends payment to the exporter¹s bank.

The funds are forwarded to the exporter.