This eCourse consists of three modules. Module 1 provides an introduction to letters of credits (L/Cs), including coverage of their various features, the L/C lifecycle, and the parties involved in that lifecycle.

Module 2 describes the process of letter of credit from issuance through to negotiation and payment in detail, including the impact of factors such as amendments, discrepancies, and variants of standard L/Cs.

Module 3 provides the background to the development of the current guidelines established by International Chamber of Commerce (ICC) to mitigate risks arising from discrepancies in the definitions, obligations, and roles of the different parties involved in letters of credit. The guidelines are known as the Uniform Customs and Practice for Documentary Credits (UCP). This module also describes how documentary credits are structured according to the ICC guidelines. The basic principles and processes are covered, as are the roles of the parties involved in documentary credit transactions.

On completion of this course, you will be able to:
- Define a letter of credit and recognize its role in facilitating payment for trade transactions
- Identify the steps involved in a typical letter of credit transaction
- Recognize the benefits and drawbacks of letters of credit from the point of view of buyers/importers, sellers/exporters, and the various banks involved in the process
- Identify the steps involved in the lifecycle of a standard letter of credit (L/C) and the role of the various participants
- Recognize the impact of amendments, discrepancies, and L/C variants on the lifecycle
- Recognize the accounting treatment of L/Cs from the issuing bank’s perspective
- List the functions of uniform customs
- Recall the different requirements that are set out by UCP 600

Module 1: Letters of Credit – An Introduction
Topic 1: Overview of Letters of Credit
Topic 2: Letter of Credit Process
Topic 3: Benefits & Drawbacks of Letters of Credit

Module 2: Letters of Credit in Practice
Topic 1: L/C Lifecycle in Practice
Topic 2: Variations on L/C Lifecycle
Topic 3: Accounting for the L/C Lifecycle

Module 3: Uniform Customs & UCP 600
Topic 1: Uniform Customs & Rules
Topic 2: Topic 2: UCP 600
Topic 3: URC 522