Unformatted text preview: Back-to-back Credit
Back-to-Bark Letters of Credit are suitable for triangle trade
Triangle trade is a trade where a middleman located between
the buyer (importer ] and the seller [exporter).
There are two separate letters of credit exist in a back-to-back
letter of credit transaction.
Buyer issues Ist. letter of credit in favor of the
Middleman issues 2nd. letter of credit in favor of the
ultimate supplier of the goods.
As back-to-back letters of credit contain two independent
credits, Issuing bank of the and letter of credit has to bear
substantial amount of payment risk For this reason back-to-
back letters of credit are rarely used in international trade....
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- Spring '18
- International Trade, Issuing Bank, back credit, Bark Letters of Credit, separate letters of credit