Category: L/C Letter Credit

L/C Letter Credit is a payment method in international trade. It is a payment method that a third-party bank provides credit guarantees for buyers and sellers. L/C Letter Credit can eliminate trade barriers for buyers and sellers, provide fair and efficient business methods, and provide convenient transaction services for international traders.

Payment By Letter of Credit Operation Process

Letter Of Credit Payment Operation Process

Payment by letter of credit is a main payment method in international trade. It is a settlement method paid by the bank to the seller (exporter) on behalf of the buyer (importer) under the condition that the documents match. Its biggest advantage is to use bank credit Make surety payments. Its operation process is about the following eight items.

Process one

After the order is confirmed, the buyer and the seller sign a contract (Payment Terms: 100% L/C At Sight). The seller sends the contract to the buyer.

Process tow

After the buyer (customer) receives the contract, according to the contract, go to a local bank (issuing bank) to apply for a letter of credit (the buyer is called the “applicant” in the letter of credit). After the buyer opens the letter of credit, Send the L/C Draft to the seller (the beneficiary of the letter of credit) by Email for the seller to review.

Process three

After the seller has checked the various terms in the L/C draft, it will notify the customer to issue the original L/C by Email. The bank where the seller is located (advising bank) will review the terms of the L/C after receiving the original letter of credit, so as to avoid unnecessary economic losses caused by the soft terms to the seller. After the seller’s local bank (advising bank) checks the L/C and there is no problem, it will notify the seller by telephone, and tell the seller that it has received a letter of credit from a certain country, and ask the seller to go to the bank to get the L/C original.


Bank notifying the seller is not free, there will be a notification fee of 200 yuan. (If there is money in the seller’s company account, the bank will directly deduct the corresponding fee from the account; otherwise, the seller must go to the bank counter to pay the corresponding fee before getting the original copy)

Process four

After getting the original L/C, the seller prepares corresponding documents (Commercial Invoice, Packing List, B/L,

Insurance Certificate, Certificate of Origin and etc), hurry up stocking and booking.


When booking with a freight forwarder, be sure to carefully read the corresponding provisions of the L/C regulations. Whether the terms allow partial shipment of goods and allow transshipment, etc.

Process five

Before and after sailing, the B/L, Insurance Certificate, Certificate of Origin and other documents have come out. At this time, if the seller is not at ease with the documents, he can take the documents stipulated in L/C to the bank (advising bank) and let the bank The staff reviews the documents to determine whether the documents comply with the terms and conditions in the L/C. Under normal circumstances, the bank staff will tell the seller how to make the documents and what matters should be paid attention to when making the documents. The seller should remember the details and make the documents according to the method told by the bank staff.             

Process six

After the seller gets all the original documents stipulated by L/C, it must deliver the documents to the local bank within the time limit for presentation specified in the L/C (within the validity period of the L/C). After handing over the documents, the seller has to immediately inform the buyer (the applicant for issuing the document) by email about the time of handing over the documents to the bank. The seller’s local bank (advising bank) will review the documents according to the actual situation after receiving the seller’s documents. After confirming that there is no problem with the documents, they will promptly send the documents to the buyer’s local bank (issuing bank) by international express (usually by DHL).


Before going to the bank to deliver the documents, check whether there is any surplus funds in the company account. Because the seller’s bank sends the documents to the issuing bank, the courier fee, the document review fee, etc. must be paid by the seller, and it will be deducted from the seller’s company account. After the documents are successfully sent out, the bank where the seller is located (advice bank) will give the seller a courier note. After the seller gets the express waybill from the bank (advice bank), it will promptly inform the buyer of the waybill number through Email.

Process seven

After the issuing bank receives the documents sent by the advising bank, it will notify the buyer (the applicant). After the issuing bank has verified the documents and there is no problem, they will ask the buyer to pay for the redemption. After the buyer pays, he gets all the documents and waits for the goods to arrive at the port and clear the customs. At this time, the payment also reaches the advising bank directly through the SWIFT system between banks. When the seller’s local bank (advice bank) receives the payment, it will notify the seller by telephone that the payment has been received and ask the seller to go to the bank to settle the foreign exchange.

Process Eight

After the seller receives the payment, the buyer will be notified by email that the payment has been received. The L/C payment operation ends.

Delivery Days

Delivery within 40 days after the contract takes effect

Quality Assurance

We guarantee that the bulk cargo is the same as the sample. If any quality problems are found, we will provide free replenishment and bear all transportation costs.

Free Design

Before the order becomes effective, we charge the customer $150 sample fee (it includes international express delivery fee). After the contract takes effect, we refund the sample fee to the customer.