Payment through letters of credit is regarded as a secure means for the seller to get paid under an international trade contract, since the payment is guaranteed by the bank as long as conforming documents are presented. This chapter reviews the features of letters of credit transactions and the corresponding legal framework including the Uniform Customs and Practice for Documentary Credits (UCP) adopted by Chinese law. It focuses closely on the special requirements in the UCP regarding bills of lading. It will be noted that, on some points, neither the UCP nor Chinese law provide a clear and sufficient answer, giving rise to a need for some areas of law to be considered and readdressed. The Chinese Maritime Code (CMC) as lex specialis has provided detailed provisions to regulate the issues arising from the contract of carriage of goods by sea and those evidenced on the shipping documents.