We instructed a foreign customer that we would sell only against an irrevocable letter of credit confirmed by a U.S. bank --- preferably our bank. We just received the L/C in the mail from the issuing bank. It is neither confirmed nor advised. What action do you recommend we take?

Answer: We recommend that you call or email the customer and tell them the L/C is being returned to them. Re-send your letter of credit instructions and emphasize that you require the L/C to be confirmed by your bank or by another reputable bank in the U.S. If you shipped against a letter of credit that was neither confirmed nor advised the risk would be that the L/C was counterfeit and when you presented documents to bank listed as the issuing bank it would deny issuing the L/C and your company would be in a difficult situation if the buyer had already taken possession of the shipment.

Disclaimer: The information provided in this Bulletin is not legal advice and is not a substitute for legal advise. Readers are encouraged to contact an attorney to discuss any questions that may arise after reading this Bulletin with their attorney to clarify any of the issues raised.