in such contracts might include: Financial documents — bill of exchange, co-accepted draft Commercial documents — invoice, packing list Shipping documents — bill of lading (ocean or multi-modal or charter party), airway bill, lorry/truck receipt, railway receipt, CMC other than mate receipt, forwarder cargo receipt Official documents — license, embassy legalization, origin certificate, inspection certificate, phytosanitary certificate Insurance documents — insurance policy or certificate, but not a cover note. The range of documents that may be requested by the applicant is vast, and varies considerably by country and commodity. Several methods of verifying the documents exist, each provides different variations of risk to the fact that the documents are legitimate. A Documentary Credit provides security for both buyer and seller. Outlined in the UCP 600, the bank will give an undertaking (or promise), on behalf of buyer (who is often the applicant) to pay the beneficiary the value of the goods shipped if acceptable documents are submitted and if the stipulated terms and conditions are strictly complied with. The buyer can be confident that the goods he is expecting only will be received since it will be evidenced in the form of certain documents, meeting the specified terms and conditions. The supplier finds his confidence in the fact that if such stipulations are met, he will receive payment from the issuing bank, who is independent of the parties to the contract. In some cases, a letter of credit will require the documents to be collected. Subject to ICC's URC 525, sight and usance, for delivery of shipping documents against payment or acceptances of draft, where shipment happens first, then the title documents are sent to the buyer's bank by seller's bank, for delivering documents against collection of payment/acceptance. Other forms of effected payment is the direct payment where the supplier ships the goods and waits for the buyer to remit the bill, on open account terms. Risk Exposure Letters of Credit are often used in international transactions to ensure that payment will be received where the buyer and seller may not know each other and are operating in different countries. In this case, the seller is exposed to a number of risks such as credit risk, and legal risk caused by the distance, differing laws and difficulty in knowing each party personally. Some of the other risks inherent in international trade include: Fraud The payment will be obtained for nonexistent