A Documentary Letter of Credit (DLC) is a bank's guarantee of payment in international trade. The buyer's bank promises to pay the seller if they present required documents proving they've met the sales contract terms. This protects both parties: the seller is assured payment upon compliance, and the buyer pays only when goods are shipped and conditions met. The process involves buyer, seller, their banks, and specific documents like invoices and bills of lading. Banks scrutinize these documents for compliance before payment. DLCs are governed by international rules (UCP). While secure, they can be complex and costly, making them suitable for larger, riskier transactions.