Letters of Credit

EENI- School of International Business

Subject Subject (Course): International Methods of Payment. Letters of Credit. Documentary credits UCP 600. Syllabus:

  1. Introduction to the international methods of payment.
  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).
    - Types and modalities
    - Terminology
    - Opening a letter of credit
    - Availability
    - Contents of the letter of credit
    - Documents...
    - UCP 600.
  9. Electronic L/C (e-UCP)
  10. Analysis of documentary credits.
  11. Import letters of credit.

Objectives - 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 the exporter.
  2. Understanding what documentary collections are and how they work. Export and import collections will be analysed.
  3. Understanding the following:
    1. The importance of documentary credits and letter of credit in international trade
    2. How documentary credit works
    3. The obligations of the parties involved
    4. To understand how import documentary credits operate.

In this subject; we will examine how to receive and effect payment for international contracts of sale. The student will become familiar with the parties, obligations, and key terminology used in documentary credit operations as will as learn about the key checklists to take into account when preparing documents for presentation under documentary credits.

Our 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.


Subject “Methods of payment / Letters of Credit” is studied...
  1. Master in Foreign Trade and International Marketing (Online)
  2. Professional Master's Program in International Business
  3. Diploma in International Trade
  4. Payment methods Course

Languages of study: English or French Crédits Documentaires Spanish Créditos documentarios Portuguese ar

Credits of the subject “Methods of payment/Letters of Credit”: 4 ECTS/2 AC.

Area of Knowledge: Foreign trade.

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

Letter credit

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

Letters of Credit

Import Letters of Credit.

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 DC application form and most importantly how to analyse the credit as issued.

A Documentary Collection (Contents: Documentary collection. Clean Collection. Bill of Exchange. Managing collections. Doc. Collection Simulation.)

It is a method of payment whereby the exporter initiates, through the banking system, the collection of money due to him from the importer. Payment will be made against a Bill of Exchange and documents of title. Documents can be released against acceptance of the Bill of Exchange or payment at sight. This course will give to the student a practical understanding of this popular method of payment.

The Uniform Rules for Collections, 1995 Revision, International Chamber of Commerce Publication No. 522, 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.

  1. Learn the differences between clean and documentary collections and analyse the advantages and disadvantages for the importer and the exporter.
  2. Find out how to complete a Bank Documentary collection order and how to manage export collections at the Bank.
  3. Understand the difference between documents against acceptance and documents against payment.

Related information:

  1. Russian payment system
  2. Asian Clearing Union (ACU)
  3. Latin American Integration Association (ALADI)

U-EENI University