Before payment, but after the buyer accepts the draft. Very little or none, depending on terms of the letter of credit. Many risks such as buyers integrity and standing and political and economic instability. Reliance on the buyer to pay the draft when due. Other risks are the same as for a sight draft, except the goods have already been released.
Seller relies completely in the buyer to pay the account as agreed.
Political and economic risks. Relatively low in terms of whether shipment has been made. Relies completely on the seller to ship goods described in documents. Relatively low in terms of whether shipment has been made. Relies completely on seller to ship goods described in documents.