The import L/C is a payment undertaking by issuing bank to the foreign importer. The issuing bank will fulfill its payment obligation when the terms and conditions stipulated in the L/C are complied with.

Advantages:

1. Improvement of your bargaining position in a negotiation. Opening L/C provides the exporter with a conditional payment commitment of the issuing bank on top of the commercial credit, giving you better credit by which you may win favorable price terms for your goods;

2. Warranty of your cargo. Commercial credit is enhanced by bank credit through the product. The trade itself will be warranted by the bank, and the ownership of the cargo, shipping date and quality of cargo are well controlled under the documents and terms;

3. Reduction of fund occupation. For the importer who uses the L/C with credit limits, the fund occupation will be minimized during the period between the L/C issuance and payment.