Letter of Credit negotiation is defined within Uniform Customs & Practice for Documentary Credits as the "giving of value". In effect, by negotiating export documents under a Letter of Credit, Standard Chartered will pay you, the Exporter, with its own funds, and will rely on the reimbursement by the Issuing Bank at a later date. Letters of Credit that are both available at sight or usance are capable of being negotiated.
Negotiation of documents under a Letter of Credit can either be with or without recourse to you. If the export documents are compliant with the Letter of Credit terms and the Letter of Credit is confirmed by Standard Chartered, then negotiation will be without recourse to you. On the other hand, if the Letter of Credit is not confirmed, then negotiation will be with recourse to you (By recourse, we mean that in the event the Issuing Bank refuses to pay or accept documents under the Letter of Credit, Standard Chartered will have the right to claim reimbursement, with interest, on the funds that have been advanced to you).
Benefit