Parties to a Letter of Credit: Roles, Rights and Responsibilities
Who the parties to a Letter of Credit are and what each one is responsible for under UCP 600.
Reviewed by LCCheck team (owner-approved) · 2026-10-12
Short answer
A Letter of Credit involves an applicant (buyer), an issuing bank, a beneficiary (seller), and usually an advising bank. It may also involve a nominated bank, a confirming bank and a reimbursing bank. Each party's role is defined in UCP 600 Article 2 and later articles.
| Core parties | Applicant, issuing bank, beneficiary |
|---|---|
| Often added | Advising, nominated, confirming, reimbursing bank |
| Definitions | UCP 600 Art. 2 |
Roles
- Applicant — requests the credit; pays the issuing bank.
- Issuing bank — undertakes to honour a complying presentation (Art. 7).
- Beneficiary — ships and presents documents to be paid.
- Advising bank — checks apparent authenticity and passes on the credit (Art. 9).
- Nominated bank — authorised to honour or negotiate (Art. 12).
- Confirming bank — adds its own undertaking (Art. 8).
- Reimbursing bank — pays the claiming bank for the issuing bank (Art. 13).
Sources
General guidance, not legal advice. Your bank examines documents independently.
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