LETTER OF CREDIT
Letter of Credit is an irrevocable obligation of the Bank to pay the letter of credit amount to the seller of the goods if the seller has fulfilled the conditions specified in the letter of credit and submitted to the Bank the documents confirming the fulfillment listed in the letter of credit. The uniqueness of letter of credit lies in the fact that not the buyer, but a neutral party (a bank) that assumes the obligation to pay the seller for the goods. Banks are obligated by law to be transparent in their activities and not to take too high risks, as a result of which the creditworthiness and liquidity of banks is considered to be higher than that of other companies.
Working with letters of credit Tallinn Business Bank is guided by the publication No. 600 of the International Chamber of Commerce (edition 2007), the Uniform Customs and Practice for Documentary Credits» ( abbreviation UCP 600).
Tallinn Business Bank carries out operations on export (bank`s client is the seller of the goods / services) and import (bank`s client is a buyer of goods / services) letters of credit, namely:
- Immediate payment letter of Credit
- Deferred payment letter of credit
- Confirmed letter of credit