|JEL Classification: G28; G35
Burkovskaya A., Ph.D. (Economics), Associate Professor of Department of Finance, Banking and Insurance, Mykolaiv National Agrarian University, Ukraine
Pavlenko V., Applicant for Higher Education, Management Mykolayiv National Agrarian University, Ukraine
Use of Letter of Credit Form of Settlements in Ukraine
Annotation. Introduction. The current state of Ukraine’s development provides broad conditions for enterprises in world trade, so the question arises how to minimize the risks of trade operations. The presence of risks and an unstable external environment can lead to non-fulfillment of obligations by the parties to the contracts. Therefore, the study of the letter of credit system for services is relevant because it will be able to ensure minimal cost risk.
Purpose. The purpose of this article is to study the letter of credit as one of the reliable mechanisms for payment of foreign trade operations, and its use in Ukraine.
Results. The article examines and investigates the system of letter of credit and its use in Ukraine. The main regulations on the regulation of letter of credit calculations are considered. The main advantages of the letters of credit are defined. The main stages of letter of credit conclusion are systematized. The impact of scientific and technological progress on the simplification of letters of credit is considered. Systematized main types of letters of credit and their classification.
Conclusions. Using a letter of credit as a method of payment for goods and services will minimize the risks of both the seller and the buyer. In turn, the reform of the National Bank of Ukraine will allow the letter of credit to gain popularity and possibly become the main means of payment for foreign trade agreements.
Keywords: letter of credit; form of calculations; obligation of the parties; types of letters of credit; basic regulations.
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Received: 18 November 2020
How to quote this article?
|Burkovskaya A., Pavlenko V. (2020). Use of Letter of Credit Form of Settlements in Ukraine. Modern Economics, 24(2020), 39-44. DOI: https://doi.org/10.31521/modecon.V24(2020)-06.|