LC Confirmation

Letter of Credit (L/C) confirmation provides a guarantee of payment to the exporter provided that all terms and conditions of an L/C (issued by another bank) are complied with. It takes a form of “open confirmation” or “silent confirmation,” depending on whether or not the confirmation is disclosed to all relative parties.

Benefits of L/C Confirmation Arrangement

Risk hedging

Country risk and payment risk of the L/C issuing bank can be covered by confirmation subject to complying documents presented to the contracted foreign FIs.