5. Transferable Letter of Credit
- Transferable Letters of Credit are suitable for triangle trade. Triangle trade is a trade where a middleman exist between the buyer (importer) and the seller (exporter).
- Transferable letter of credit issued in favor of the middleman. Then middleman transfers part of the credit to the ultimate supplier of the goods.
- Middleman’s Middleman’s commission commission is the difference difference of these two credit amounts amounts. (issued amount-transferred amount=commission of the middleman)
- Transferable Letters of Credit can be issued subject to UCP 600.
- Transferable credit can be transferred more than one beneficiary. (partial transfer is allowed)
- Transferred credits can not be transferred to another second beneficiary once more.
