A Transferable Documentary Credit is a Documentary Credit with the option to allow an intermediary agent to transfer their rights and obligations to the supplier. As a result the supplier is also required to meet your terms and conditions.
A Transferable Documentary Credit is often used when:
- The intermediary agent is unable to supply some or all of the goods stipulated in the Documentary Credit and therefore wishes to transfer part, or all, of the credit
- The intermediary agent is unable to secure back-to-back credit facilities from their bank and the supplier demands settlement by Documentary Credit
- The intermediary agent acts as the sourcing agent and is responsible for distributing portions of the Documentary Credit (usually a large amount) to various suppliers