Non-Transferable L/C

A non-transferable letter of credit refers to a letter of credit that explicitly prohibits the beneficiary from transferring its rights or part of its rights under the letter of credit to a third party. According to Article 38 of UCP600, a letter of credit is transferable only when it is explicitly marked as "transferable"; therefore, one that is not marked or is marked as "non-transferable" is a non-transferable letter of credit. Use cases: When an importer has a long-term trusting relationship with a specific exporter, or when the exporter is the actual supplier and no intermediary is needed, a non-transferable letter of credit is usually issued. Precautions: The beneficiary cannot transfer the rights under the letter of credit to another party, but may assign proceeds (Assignment of Proceeds). The two are different—transfer involves the right to present documents for performance, while assignment involves only the right to receive payment. Difference from a transferable letter of credit: A transferable letter of credit allows the beneficiary (first beneficiary) to request the transferring bank to transfer the letter of credit in whole or in part to a second beneficiary, and is commonly used in intermediary trade; a non-transferable letter of credit has no such function, and an intermediary cannot earn the price difference through transfer. In addition, under a non-transferable letter of credit, the beneficiary must present documents itself, and a third party cannot present documents directly (unless the letter of credit allows third-party documents).