What is a confirmed accreditation?
A farm letter is a document used in international transactions. It is issued by the bank of the shopping company to guarantee that the buyer has money available to transfer to the seller after receiving the purchased goods. The confirmed letter of credit corresponds to the other opinion - some sellers require that one of the other institution to guarantee that money is available.
The seller usually has its own bank, which participates in the transaction. The original letter of credit from the issuing bank is sent to the bank, which represents the seller. Both banks cooperate in support of the transaction between the buyer and the seller in the international transaction. Both banks remain connected throughout the process. The connection of both banks includes the original letter of credit and a confirmed accreditation.
essentially confirmed accreditation includes two banking or financial insights that hold money for business that buys goods. This is a double warranty that if one of the banks in fact cannot cover the cost ofGoods, the second institution will hold enough money to cover the amount of goods that the buyer buys.
The seller usually requires a letter of credit to guarantee to receive money that will be payable as soon as they send the goods. This document also protects the buyer because he does not have to subscribe to the goods until he receives the confirmation that the goods have been actually sent. The confirmed letter of credit is simply added insurance for both parties, for which the goods will be paid and received by agreement.
The confirmed accreditation is not just double insurance, but may be the necessity of transactions involving a country. Countries that experience political or economic instability may require a second financial institution to participate in each of its international trades than to rely on the original accreditation.
As soon as the Accreditation and a confirmed accreditation are received, the seller usually supplies the goods. Once the bank is buyingHe receives the confirmation that the goods have been sent, then the funds are published according to the conditions set out in the letter of credit and support document.