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| Letters of credit. |
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| Letters of credit
There are many variations, but a simple Letter of Credit is a secured draft that is passed between the buyer (opener) and seller (beneficiary) via intermediary banks which guarantee payment to variable extents.
The most commonly used type is a confirmed, irrevocable Letter of Credit which means that the Letter of Credit must involve a local bank friendly to the seller (confirmed) and that the buyer cannot back out of the arrangement (irrevocable).
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