One of the main principal instrument offered by the BBAC for executing and securing payments in international trade are documentary credit.

A documentary credit is an undertaking made by a bank, either at the request of the applicant for the credit or on its own behalf, to pay a specified amount in an agreed currency to a beneficiary, on condition that the beneficiary presents stipulated documents within a prescribed time limit.

In most cases, the bank acts as an intermediary between the buyer and the seller. However, subject to the applicable national legislation, banks may also issue documentary credits on their own account; especially in the case of standby credits. Settlement of documentary credits is effected through the bank by means of a direct exchange: the beneficiary presents the required documents to the bank and receives in return the amount specified in the credit (in the form of cash, an accepted bill of exchange or an undertaking to pay, depending on the terms of the credit). With a documentary credit, the beneficiary is no longer dependent on the buyer’s ability or willingness to pay. Moreover, he can obtain liquid funds shortly after dispatching the goods.

Documentary credits go a long way towards reconciling the conflicting interests of the buyer and the seller:

- The seller wants to be sure that the price of the goods will be paid in the correct currency and as soon as possible.
- The buyer does not want to pay for the goods before they have actually been dispatched.

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