An importer self-obligates accepting a bill of exchange and, on its presentment at a certain bank, paying the stated amount, as documented in this letter. Securing that bank’s acceptance of an exporter’s draft for payment through its correspondent bank (where the draft will be presented) is the goal of this document.. Used mainly in the Far East: China, Japan, Korea, Singapore, Taiwan, among others.

More On This Topic

Link to This Definition
Did you find this definition of LETTER OF GUARANTEE helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary