DCs can be irrevocable or revocable. With a revocable DC, the buyer can change or cancel it after issuance. You should always insist on an irrevocable DC so that it can’t be cancelled without your consent.
Import & export
How Documentary Credits Work
In basic terms, a Documentary Credit (DC) is an undertaking by a bank to make payment, provided the terms of the DC are met. There are several types of DC – the main difference is that some are more suited to transactions involving middlemen or traders.
Revocable or irrevocable?
Trade Finance
An export DC makes it easier to obtain pre-shipment finance in the form of a packing credit, or post-shipment finance where the documents under the DC are negotiated.
Three reasons for HSBC to issue a DC to you
- Our trade specialists will ensure that your DCs are as free from discrepancies as possible
- We will email or fax a copy of the DC to you for reference
- We can hold the DC in safe custody for you
Different types of DC
Disclaimer:
Global Trade Solutions transactions may be subject to credit approval. Other restrictions, including specific country regulations, may apply. Foreign currency exchange rates may apply to certain trade transactions.
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