A Transferable Letter of Credit (LC) is a documentary credit under which the Beneficiary (first Beneficiary) may request the bank specifically authorised in the credit to transfer the credit, available in whole or part, to one or more secondary Beneficiary(ies). The LC can be transferred only in accordance with the terms and conditions stipulated in the original LC, with the exception of the following which may be changed:
the LC amount
the unit price of goods (if stated in the original LC)
the time of shipment
the last date for presentation of negotiation documents
the expiry date of LC Any or all of the above may be reduced in the transferred credit to the second Beneficiary.
Moreover, the name of the Applicant can be substituted with the name of the first Beneficiary, unless the original LC stipulates that the name of the Applicant be used in any document other than the invoice. If all or part of the LC is transferred, the first Beneficiary retains the right to substitute their own drafts and invoices for those of the second Beneficiary, if they so require. Instructions must also be provided on whether the bank is allowed to make any amendments to the original LC to the second Beneficiary.