4.01 Operation of a letter of credit often involves three independent but interlocking stages. Typically, it begins when the beneficiary presents a set of documents to the bank with which the credit is expressed to be available for honour1 or negotiation.2 Then, a nominated bank, having acted on its nomination and taken up the beneficiary’s presentation, tenders the documents to the issuing bank for reimbursement of the sum it has paid under the credit. The last phase of the process entails the issuing bank’s delivery of the documents, usually against a trust...
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