Choose a trading partner with good credit standing. For the buyer, the reliable credit of the trading partner is the key to preventing fraud in the letter of credit. Before signing a sales contract that uses a letter of credit as a payment method, the buyer must do a prior credit investigation, which is directly related to whether the other party has the ability to perform the contract and whether it can perform the contract honestly and faithfully. If the seller’s credit is not known or the transaction volume is relatively large, the buyer can request the seller to provide mortgaged property or provide contract guarantee to urge the seller to fulfill its obligations.
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