D-1-2-7- The documentary credit by acceptance (draft)

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.

1-2-7-1- 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.

1-2-7-2- The documentary credit by acceptance : definition

A documentary credit by acceptance involves the exporter submitting documents to the designated bank, accompanied by a draft.

La banque accepte alors l'effet de commerce et le retourne l'exportateur. The bank accepts then the bill of exchange and sends it back to the exporter. In contrast with the other embodiment, this documentary credit is not confirmed nor notified. Indeed, this type of documentary credit is not notified because there is no difference here between notification and confirmation.

1-2-7-3- The documentary credit by acceptance : advantage

Note there is a cost advantage to not being confirmed.