Economics · International Trade Finance

What is mandatory for payment to be executed under a standard Documentary Credit (Letter of Credit)?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1The physical goods must reach the final destination before any payment processing begins.
2The seller must present the stipulated documents in strict compliance with the terms and conditions of the LC.✓
3The buyer must wire transfer the payment directly into the seller's commercial account.
4The buyer must formally approve the financial creditworthiness of the seller.

Correct answer

The seller must present the stipulated documents in strict compliance with the terms and conditions of the LC.

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