Document background
The Advising Bank Letter of Credit is essential in international trade transactions conducted under U.S. jurisdiction, serving as a critical link between foreign issuing banks and local beneficiaries. When an issuing bank opens a letter of credit in favor of a beneficiary in another country, it typically requests a bank in the beneficiary's country to act as the advising bank. The advising bank's role is to verify the authenticity of the letter of credit and communicate its terms to the beneficiary. This document is governed by U.S. banking regulations, particularly UCC Article 5, and typically follows UCP 600 guidelines. It contains detailed information about the credit terms, required documents, shipping requirements, and payment conditions. The document is crucial for risk mitigation in international trade, providing assurance to sellers while protecting buyers' interests through documentary requirements.
