Letter of Credit (LC)

A letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking (it can also be revocable, confirmed, unconfirmed, transferable or others e.g. back to back: revolving but is most commonly irrevocable/confirmed) to a beneficiary against complying documents as stated in the Letter of Credit. Letter of Credit is abbreviated as an LC or L/C, and often is referred to as a documentary credit, abbreviated as DC or D/C, documentary letter of credit, or simply as credit (as in the UCP 500 and UCP 600).


After a contract is concluded between buyer and seller, buyer's bank supplies a letter of credit to seller.

Seller consigns the goods to a carrier in exchange for a bill of lading.

Seller provides bill of lading to bank in exchange for payment. Seller's bank exchanges bill of lading for payment from buyer's bank. Buyer's bank exchanges bill of lading for payment from buyer.

Buyer provides bill of lading to carrier and takes delivery of goods.

Source : http://en.wikipedia.org/wiki/Letter_of_credit

Cancellation of K4

1) K4 was cancelled due to wrongly key in the BL number.
Wrong BL : XXXXXN00291214
Correct BL : XXXXXH00291214
2) Procedures of cancellation:
a. Duplicate the from the wrong BL number job to a new job (00291214A).
b. Cancel the job for wrong BL number (00291214) and submit the cancellation job (Cancellation job number is 00291214_C and all the details will remain blank for the cancellation job.
c. Submit the correct BL number job (00291214A) – will not response error of “BL Duplicate” because the BL number is different.
3) Submit letter of “Pembatalan K4 manifes” to Custom to get the cancellation job approved instead of pending approval. Details as below:
a. Get approval from custom officer (PKPK)
b. Submit the approved letter to officer at Unit Kawalan Manifes and ask for approval in the system.
Note: Letter format is in Excel File - PEMBATALAN MANIFES (WRONG BL NUMBER)


Only after the letter being approved by PKPK and submit the letter to unit kawalan manifest the only the cancellation will be approved

Sample Letter for Cancelation of Manifest

Letter: Pembatalan Manifes (Wrong BL number)