EENI-Business School

Letters of Credit

Syllabus of the Subject: International Payment Methods. Letters of Credit. Documentary credits UCP 600.

  1. Introduction to the International Payment Methods
  2. Countries and payment terms
  3. Bills of Exchange
  4. Bank Draft
  5. Bank Transfer
  6. Clean collection
  7. Documentary Collections
  8. Letters of Credit (L/C)
    1. Types and modalities
    2. Terminology
    3. Opening a letter of credit
    4. Availability
    5. Contents of the letter of credit
    6. Documents
    7. UCP 600
  9. Electronic L/C (e-UCP)
  10. Analysis of the documentary credits
  11. Import letters of credit

The subject “Methods of payment/Letters of Credit” aims at:

  1. Analysing various methods of payment used in international trade and outlining their differences, advantages, and disadvantages both for the importer and exporter
  2. Understanding what documentary collections are and how they work. Export and import collections will be analysed
  3. Understanding the following:
    1. Importance of the Documentary credits and letter of credit in the international trade
    2. How the Documentary credit works
    3. The obligations of the parties involved
    4. To understand how import documentary credits operate

In this subject:

  1. We will examine how to receive and effect payment for international contracts of sale
  2. The student will become familiar with the parties, obligations, and key terminology used in documentary credit operations
  3. As well as, the student learns about the key checklists to take into account when preparing documents for presentation under documentary credit.

The focus will be on export methods of payment. The information presented here is also applicable to import transactions.

The selection of the most suitable method of payment is a key factor of a successful export sale.

Documentary Collection

  1. Documentary collection
  2. Clean Collection
  3. Bill of Exchange
  4. Managing collections
  5. Documentary Collection Simulation


  1. To learn the differences between clean and documentary collections and analyse the advantages and disadvantages for the importer and the exporter
  2. To find out how to complete a Bank Documentary Collection order and how to manage export collections at the Bank
  3. To understand the difference between documents against acceptance and documents against payment
The Subject “Methods of payment / Letters of Credit” is part of the following programs:
  1. Masters (e-learning): International Business, Foreign Trade and Marketing
  2. Diploma in International Trade
  3. Payment Methods Course
  4. Bachelor's Degree in International Trade (e-learning)

Languages of study English or French Crédits Documentaires Spanish Credits documentarios Portuguese Crédito Documentário ar

Credits of the subject “Methods of payment/Letters of Credit”: 4 ECTS.

Area of Knowledge: Foreign trade.

Examples of the subject - Methods of payment/Letters of Credit:
Documentary credits

Letter credit

Description of the Subject (Methods of payment/Letters of Credit):

A documentary credit is an agreement under which a Bank is acting at the request and on instructions of the importer makes an undertaking to effect payment to the exporter against presentation of the required documents within the specified period, provided that the documents strictly comply with the terms and conditions stipulated in the documentary credit.

The Letters of Credit are more favourable for the exporters rather than importers, as they are aimed at protecting the exporter.

This is a short but crucial subject. The ability of the trade practitioner and their bankers to issue documentary credits, which are complete and precise, is essential. This subject will familiarise the student with the role of the Issuing Bank, how to complete the documentary credit application form and most importantly how to analyse the credit as issued.

Letters of Credit

Documentary Collection

It is a method of payment whereby the exporter initiates, through the banking system, the collection of money due to him from the importer.

  1. Payment will be made against a Bill of Exchange and documents of title.
  2. The documents can be released against acceptance of the Bill of Exchange or payment at sight.

This subject will give the student a practical understanding of this popular method of payment.

The Uniform Rules for Collections, the International Chamber of Commerce Publication, shall apply to all collections where such rules are incorporated into the text of the “collection instruction.”

In this subject; we will provide practical examples of the application of URC 522. All serious International Trade specialists should obtain a copy of this International Chamber of Commerce Publication.

Related information:

  1. Single Euro Payments Area
  2. Russian payment system
  3. Asian Clearing Union (ACU)
  4. Latin American Integration Association (ALADI)

European Central Bank (ECB)

(c) EENI- Business School