back-to-back credit

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A method used to conceal the identity of the seller from the buyer in a credit arrangement. When the credit is arranged by a British finance house, the foreign seller provides the relevant documentation. The finance house, acting as an intermediary, issues its own documents to the buyer, omitting the seller's name and so concealing the seller's identity. The reason for not revealing the seller's identity is to prevent buyer and seller dealing direct in future transactions and thus cutting out the middle man.

Subjects: Financial Institutions and Services.

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