Documentary creditsDocumentary credits

The documentary credit is one of the most secure payment methods in international trade, offering the exporter a conditional payment guarantee from the importer’s bank.

Documentary credits usually require the presentation of certain documents, which must be complied with before payment can take place. You must be aware that banks examine the documents only with respect to the documentary credit and do not look at contracts, agreements or the condition of the goods.

We have compiled a set of checklists to help you make sure that every document is filled in correctly.

What to look out for in every document involved in the documentary credit process:

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Overview of documentary creditsOverview of documentary credits

Documentary credits for exporters
For an exporter, a documentary credit from the importer's bank removes the risk that the buyer will not pay.

D/C for exporters
Documentary credits for importers
For an importer, a documentary credit requires the exporter to comply with the agreed conditions before payment is made.

D/C for importers
Standby documentary credits
Unlike a standard documentary credit, a standby D/C is activated only if the expected payment does not take place.

Standby D/C
The Documentary credit process
We have outlined the steps in the documentary credit process and presented them graphically.

See the documentary credit process
International rules
Documentary credits are subject to various international rules and regulations. Here you have an outline of these.

International rules
We have compiled a glossary of terms often used in transactions involving documentary credits. 

See a glossary of D/C terms
We have compiled a set of frequently asked questions in relation to handling documentary credits.

FAQ about documentary credit
Incoterms 2000
Companies use ICC's standard trade definitions to describe risks, responsibilities and obligations.

Incoterms 2000

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Danske Bank A/S, London Branch, 75 King William Street, London EC4N 7DT, United Kingdom. Telephone: +44 (0)20 7410 8000 Facsimile: +44 (0)20 7410 8001 E-mail: VAT number: 853 7590 92. Danske Bank A/S, London Branch is authorised by the Danish Financial Supervisory Authority (Finanstilsynet) and is subject to limited regulation by the the Financial Conduct Authority and the Prudential Regulation Authority. Complaints should be addressed to our Legal Department. Details on the extent of our regulation by the Financial Conduct Authority and the Prudential Regulation Authority are available from us on request. Registered Branch in England and Wales, Company No. FC011846, Branch No. BR000080. Danske Bank A/S, Incorporated in Denmark, CVR No. 61 12 62 28 Copenhagen. Our details can also be viewed on The Financial Services Register under Firm Reference Number 124655.

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