Cross-border trade transactions often involve significant financial exposure between parties who may have limited prior experience working together. In such circumstances, financial safeguards become essential to ensure that contractual and payment obligations are fulfilled as agreed.
Letters of Credit and Bank Guarantees are among the most widely used trade finance instruments for reducing risk and strengthening credibility in international transactions. By introducing bank-backed assurance and clearly defined financial commitments, these instruments help facilitate smoother trade execution while providing confidence and protection to both buyers and sellers operating in global markets.