Question
Regarding Letter of Credit (LC) and Bank Guarantee
(BG): 1. LC is a primary payment mechanism used in trade. 2. BG is a contingent liability for a bank. 3. In a "Revocable LC," the opening bank can cancel the LC without notice to the beneficiary. Which of the statements above is/are correct?ÂSolution
All are correct. However, in modern international trade (UCP 600), almost all LCs are now "Irrevocable" by default.
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