Documentary Letter of Credit
Documentary Letter of Credit. It is an irrevocable undertaking by an institution (the issuing financial institution) to the beneficiary of the documentary letter of credit on behalf of their customer to pay the stated amount at sight or at a determinable future date or to accept a draft and effect payment at maturity subject to the presentation of compliant documents as stated in the terms and conditions of the letter of credit.
They are normally subject to internationally recognized rules of practice issued by the International Chamber of Commerce (ICC). ICC's current publication is called Uniform Customs and Practice forDocumentary Credits (UCP) 600.