Unconfirmed L/C
Category: Payments
Definition (plain English)
An unconfirmed LC is supported only by the issuing bank, without an added payment undertaking from another confirming bank.
Why it matters commercially
The seller still depends on issuing-bank and country risk, so bank quality, currency transfer rules, and sanctions exposure must be assessed before shipment.
Example
A supplier accepted an unconfirmed LC from a well-rated buyer bank but refused the same structure from a higher-risk market without confirmation.
Common mistake
Treating any LC as equally secure without checking whether it is confirmed, which bank is obligated, and where payment risk remains.
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