An irrevocable Letter of Credit can be either confirmed or
unconfirmed.
In a confirmed Letter of Credit, the issuing bank
(representing
the buyer) agrees independently to the buyer's commitments
to
pay the seller the agreed-up amount of money, as long as all
the
requirements of the Letter of Credit are fulfilled.
A confirmed irrevocable Letter of Credit can become very
elaborate. A second bank (often specified as a prime bank)
may
confirm or otherwise guarantee payment of the foreign bank
that
initially opened the Letter of Credit. This requirement
originates
from the seller and usually takes places only if the bank of
the
buyer is not internationally established.
UNCONFIRMED L/C
A letter of credit which has not been guaranteed or confirmed by
any bank other than the bank that opened it. The advising bank
merely informs the beneficiary of the letter of credit terms and
conditions.
