The purpose of this study is to analyze: 1) What is the meaning of Letter of Credit? 2) What is the legal basis for using Letter of Credit in export-import trade payment transactions? The research method used is normative juridical with a statutory approach, concept approach, and case studies. The results showed that: 1) The term Letter of Credit is also called documentary of credit in English, and in Indonesian it is used with the term documented credit. In general, Letters of Credit are used to finance long-distance sales contracts between buyers and sellers who do not know each other well. 2) Letter of Credit regulation in Indonesia is regulated based on Government Regulation No. 1 of 1982, and Bank Indonesia Regulation No. 26/34/external debt dated December 17, 1993 concerning Letter of Credit. A letter of credit is a conditional guarantee and is a letter issued by the issuing bank at the request of the importer submitted to another bank in the exporting country for the benefit of the exporter in which the exporter is given the right to withdraw money orders on the importer concerned in the amount of money stated in the guarantee letter.