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Guide · Payment

DLC vs SBLC: How to Pay for Frozen Chicken Imports

Frozen chicken shipments move on trust backed by banks, not on trust alone. The Documentary Letter of Credit (DLC) and Standby Letter of Credit (SBLC) are the two instruments buyers and sellers use to make sure nobody ships — or pays — blind.

DLC and SBLC at a glance

DLCDocumentary Letter of Credit — pays against compliant shipping documents
SBLCStandby Letter of Credit — bank guarantee, drawn only on default
Governing rulesUCP 600 (International Chamber of Commerce)
Role in the tradeDLC is the dominant instrument in frozen-meat exports

How a DLC protects both sides

The buyer's bank — the issuing bank — commits to pay the seller once the seller's bank (the first-tier or advising bank) confirms the shipping documents match the credit exactly. The seller only ships once the credit is issued and confirmed; the buyer only pays once the goods are proven shipped and inspected. Neither side is exposed to the other defaulting mid-transaction, which is why the DLC is the default instrument for containers of frozen chicken paws moving between Brazil and buyers worldwide.

Where the SBLC fits in

An SBLC works differently: it is a standby guarantee, not a routine payment mechanism. It sits in reserve and is only drawn if a party fails to perform — for example if a buyer fails to pay under agreed open-account terms. In the frozen meat trade, the SBLC is used far less often than the DLC precisely because the DLC already ties payment to document compliance on every single shipment.

Document compliance is what releases payment

Under either instrument, banks pay on documents, not on goods. That makes the underlying document set — including the independent inspection certificate — decisive. See our SGS & Intertek inspection guide for what that certificate covers, and our guide to importing chicken paws from Brazil for where payment terms fit into the wider import process.

Structure your payment terms with us

Duna Trading supplies Grade A frozen chicken paws and feet from SIF-registered, GACC-listed Brazilian plants, and works with buyers on DLC or SBLC terms under UCP 600. Tell us your product, quantity and destination and the São Paulo desk reverts with a quotation and proposed payment structure.

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DLC vs SBLC — FAQ

Common questions about paying for frozen chicken imports.

What is a Documentary Letter of Credit (DLC)?

A DLC is an irrevocable undertaking from the buyer's bank to pay the seller once the seller presents a set of shipping documents — bill of lading, commercial invoice, packing list, certificate of origin, health certificate and the inspection certificate — that comply exactly with the terms of the credit. It is the primary payment method in the frozen chicken trade because it ties payment directly to proof that the goods were shipped as agreed.

How is an SBLC different from a DLC?

A Standby Letter of Credit (SBLC) is not the primary payment mechanism — it is a bank guarantee that sits in the background and is only drawn if one party defaults on its obligations. A DLC pays out routinely against documents every shipment; an SBLC is meant to never be drawn at all. Buyers and sellers sometimes use an SBLC alongside other payment terms as a performance guarantee.

What rules govern letters of credit in international trade?

Both DLCs and SBLCs used in trade finance are typically issued subject to UCP 600, the Uniform Customs and Practice for Documentary Credits published by the International Chamber of Commerce. UCP 600 standardises how banks examine documents, what counts as a discrepancy, and the timelines banks must follow — which is why it is referenced on the credit itself.