A: Back to Back Credit (Back to Back Credit) means that the beneficiary takes the original credit as collateral and asks the bank to issue another letter of credit with similar contents on the basis of the original credit。Back-to-back letters of credit are usually applied for by intermediaries to be issued to actual suppliers。Back-to-back letters of credit are used in a similar way to transferable letters of credit, except that the issuing bank did not authorize the beneficiary to transfer the credit and is therefore not responsible for the new credit。The beneficiary of back-to-back letters of credit can be foreign or domestic。
Transferable letter of credit means that the letter of credit is marked with "Transferable", and the beneficiary has the right to transfer the whole or part of the letter of credit to one or more third parties (i.e. the second beneficiary) for use。The beneficiary of a transferable letter of credit is usually the middleman and the second beneficiary is the actual supplier。The beneficiary may request the authorized bank (transferring bank) in the credit to issue a new credit to the second beneficiary, and the new credit shall be paid by the original issuing bank。The terms of the original letter of credit remain unchanged, but the amount of the letter of credit, the unit price of goods can be reduced, the validity period and the shipment time can be advanced, the proportion of insurance can be increased, and the applicant can become the original beneficiary。A transferable credit can only be transferred once, that is, the second beneficiary cannot be transferred to a new beneficiary。 In the course of use, when the second beneficiary submits the document to the transferring bank, the first beneficiary has the right to replace the invoice and draft of the second beneficiary with its own invoice and draft to obtain the difference between the original and the new certificate。