Hitellevél

Hitellevél, often translated as "letter of credit" or "credit letter," is a financial instrument used to guarantee payment in a transaction. It is a commitment by a bank or financial institution, on behalf of a buyer, to pay a seller a specified amount of money, provided that the seller meets certain conditions outlined in the letter. These conditions typically involve the presentation of specific documents, such as bills of lading, invoices, and inspection certificates, proving that the goods or services have been shipped or delivered as agreed.

The primary purpose of a hitellevél is to mitigate risk for both the buyer and the seller. For the seller, it provides assurance of payment, reducing the risk of non-payment by the buyer. For the buyer, it ensures that payment will only be made after satisfactory evidence of shipment or delivery is provided. This is particularly crucial in international trade, where parties may not know each other well and face different legal and economic environments.

Hitellevél transactions are governed by established international rules, most notably the Uniform Customs and Practice for Documentary Credits (UCP) published by the International Chamber of Commerce (ICC). These rules standardize the process and reduce ambiguity. The process typically involves the buyer applying for a hitellevél from their bank, which then issues it to the seller's bank. The seller ships the goods and presents the required documents to their bank, which forwards them to the issuing bank for examination and payment.