When you, as importer, are going to open a documentary credit, there are a number of factors that you should know about and take into consideration.
When entering into a contract
The contract between you and the seller must determine the conditions under which the documentary credit will be issued.
The seller is not always aware of which documents are required when goods are to be imported to Denmark. It is therefore important that you specify your exact document requirements when entering into the contract.
If the documentary credit is not issued as agreed at the beginning, it can mean the goods will be delayed or there could be a direct breach of the contract. There must therefore be agreement on all the conditions - including time limits for shipment, presentation of documents and expiry.
When opening the documentary credit
Before you ask Danske Bank to open a documentary credit, you should also be aware that the documentary credit cannot be cancelled or amended unless all parties have agreed to it.
The documentary credit is legally independent of the contract, which means that any changes to the contract are not automatically valid for the documentary credit.