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Sight Letter of Credit & Usance Letter of Credit

Regulations/Policies
Printed Books, Newspapers, Magazines
From Belgium
To Belarus
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Jasmine G.
Not rated
Oct 14, 2020

What is the difference between a Sight Letter of Credit and a Usance Letter of Credit?

1 answer

Oct 14, 2020

Sight Letters of Credit indicate that the drafts drawn are due upon presentation of the shipping documents. ICC rules allow International Trade Finance and your company 7 business days to review the documents for discrepancies before accepting or rejecting the documents. Upon acceptance, International Trade Finance makes payment to the Letter of Credit beneficiary according to the instructions on the draft. If the documents are rejected, International Trade Finance advises the beneficiary’s bank of the rejection and waits for instructions on how to dispose of the documents. The goods cannot be released if the documents are rejected.Usance Letters of Credit allow a specified number of days from the Bill of Lading date or from the presentation of the documents, before the draft matures. Again, ICC rules allow International Trade Finance and your company 7 business days to review the documents for discrepancies before accepting or rejecting the documents. Upon acceptance, International Trade Finance advises the beneficiary’s bank of the maturity date and makes payment to the Letter of Credit beneficiary accordingly. If rejected, International Trade Finance advises the beneficiary’s bank of the rejection and waits for instructions on how to dispose of the documents. The goods cannot be released if the documents are rejected.

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