Because of the lack of trust in international transactions,payment or a formal promise to pay is required before the buyer can obtain the merchandise.

Question

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This is true. To mitigate the risk of non-payment in international transactions, a payment or formal promise to pay, such as a letter of credit or bank guarantee, is typically required before the buyer can obtain the merchandise. This provides some level of assurance to the seller that they will be paid for the goods they are providing.

Because of the Lack of Trust in International Transactions,payment or a Formal