🤝 NEGOTIATE

🤝 NEGOTIATE

US Capital Private Bank Knowledge Base


📖 What is Negotiate?

To negotiate in the context of a Letter of Credit (L/C) means to take action to verify that the documents presented by the beneficiary (usually the seller) conform to the terms and conditions specified in the L/C. Once verified, the bank proceeds to release funds to the seller.


⚙️ Key Details

  • Ensures that all documents comply strictly with the L/C requirements.

  • Verification is performed by the negotiating bank (often the advising or confirming bank).

  • Once documents are accepted, payment is made to the beneficiary.

  • Protects both buyer and seller by ensuring terms are met before payment.


💡 Importance in Trade Finance

  • Provides security and trust in international trade transactions.

  • Helps avoid disputes by strictly following the L/C terms.

  • Facilitates timely payment and smooth transaction flow.


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