ABSTRACT
International business has changed dramatically in the past decade and will continue to change in the future. This chapter summarizes the various forms of letters of credit in international trade, and the latest trends in international relations and trades. The first letters of credit were used by the merchants and wealthy individuals promising payment based on their professional reputation in the twelfth century. Letters of credit come in many varieties. For starters, letters of credit can either be revocable or irrevocable. A revocable letter of credit can be modified by the issuer without notice to or consent from the beneficiary. In recent years, the ascendency of Brazil, Russia, India, and China has brought a new acronym created from their initials: BRICs. Brazil has seen much foreign direct investment (FDI) in both commodities and real estate. Sovereign wealth funds (SWFs) are an increasing source of power for countries that run current account surpluses primarily owing to export of commodities.
