D-1-2-4- The documentary credit payable at sight


Payment processing is one of the main preoccupations of companies with international transactions. Doing business is important, but compensation is essential. Esandis offers you free training space dedicated to international transactions, and all the skills you need to become an export or import manager. Our objective is to provide you an understanding of the importance of the payment component of an international transaction.

The documentary credit is one of these payment techniques.

1-2-4-1- The documentary credit : reminder

A documentary credit is therefore a payment technique and it is universally used within the scope of international transactions. It is one of the most secure payment techniques. This technique involves the respective importer and exporter banks. They become the guarantors of the transactions, permitting the exchange of the documents against the payment of the goods.

The documentary credit is a payment technique with rules and Uniform Customs and practices, UCP 600, that were published by the ICC, International Chamber of commerce, in 1998.

We should mention that the two most-often used documentary credits are the irrevocable documentary credit and the irrevocable and confirmed documentary credit.



1-2-4-2- The documentary credit payable at sight: general

A documentary credit payable at sight is a payment against documents that strictly conform to expectations. There are two possible scenarios:
  • If the documentary credit is notified
    When it is notified, the designated bank can defer to the issuing bank's coverage to provide payment to the recipient,

  • Or, if the documentary credit is confirmed:
    When it is confirmed, the bank pays or agrees to pay without waiting for the issuing bank's coverage.