Banking Instruments · 03
Documentary Letter of Credit
Import and export LCs under UCP 600 securing international trade flows.
MT700
SWIFT message
ICC UCP 600
Governing rules
Bill of lading, invoice, certificates
Documents
At sight or deferred
Payment
Overview
About Documentary Letter of Credit.
A Documentary Letter of Credit guarantees payment to the exporter once compliant shipping documents are presented to the bank.
LCs are governed by ICC UCP 600 and transmitted via SWIFT MT700, protecting both buyer and seller in international trade.
- Sight and deferred-payment LCs
- Confirmed LCs
- Transferable and back-to-back LCs
- Usance LCs
Financial Overview
Activity and allocation.
Trade flows secured (€m)
Banking Instruments allocation (%)
- SBLC 38%
- Bank guarantees 27%
- Documentary credit 22%
- Proof of funds 8%
- Other 5%
Year-on-year growth (€m)
Indicative figures for illustration purposes. Past performance is not indicative of future results.
Legal & Regulatory Framework
Governed by clear rules.
ICC URDG 758
Uniform Rules for Demand Guarantees govern bank guarantees issued on a demand basis.
ICC UCP 600 & ISP98
Uniform Customs and Practice for Documentary Credits and International Standby Practices.
SWIFT MT760 / MT700 / MT799
Instruments are transmitted bank-to-bank through authenticated SWIFT messaging only.
Article L.561 CMF — AML / CFT
Full due diligence on applicants, beneficiaries and underlying transactions; no instrument without a genuine commercial purpose.
Risk Management
Risks identified and controlled.
| Risk | Mitigation |
|---|---|
| Counterparty risk | Issuance exclusively by licensed, rated banking institutions. |
| Documentary risk | Wording reviewed against ICC rules before issuance. |
| Fraud risk | Verification of every instrument through bank-to-bank channels. |
| Compliance risk | Sanctions screening and source-of-funds verification on every file. |
Legal Notice
This page is provided for information purposes only and does not constitute an offer, solicitation or recommendation to buy or sell any financial instrument or to enter into any transaction. Any engagement is subject to contractual documentation, satisfactory completion of KYC / AML procedures in accordance with articles L.561-1 et seq. of the French Code monétaire et financier, and the approval of the relevant banking institutions. Holding JMB SARL — RCS Paris 528 403 074.