Letters of Credit
Q. One of the types of security suggested in the Best Practices Procurement Manual is a letter of credit drawn on the bidder's bank. Is there any restriction on the location of the bank? May a European bank issue a Letter of Credit for a procurement of rolling stock in the U.S.? We are a wholly owned subsidiary of a company that is based in the UK. Letters of Credit would be issued by the parent company's bank, in Scotland.
A. There is no FTA restriction on the location of the bank. (Revised: May, 2010)