A letter of credence is a formal letter sent by one head of state to another formally accrediting a named individual (usually but not always a diplomat) to be their ambassador in the country of the head of state receiving the letter of credence. A letter of recall is the letter sent recalling an ambassador, either as a means of diplomatic protest or because the diplomat is being reassigned elsewhere and replaced by another envoy.
In parliamentary democracies, heads of state accept or reject letters of credence on the basis of advice (that is, instructions from the government which put the head of state under obligation) from their state's government. In reality however, they are almost invariably accepted, as both states will have informally discussed the issue prior to the formal ceremony. If a problem were to arise, it would be sorted out in these earlier government to government contacts.
Letters of credence are the most formal form of state contact short of state visits. As a result, issues often arise as to the form of address, style and title used in such contacts. For example, when Italy deposed the native emperor of Abyssinia in the 1930s, the Italian state declared the King of Italy to be the Abyssinian emperor also. Not all states accepted King Victorio Emanuele III's right to use this title, with the result that some letters of credence were addressed to the 'King of Italy and Emperor of Abyssinia', others to the 'King of Italy'. King George VI, as 'King of the United Kingdom of Great Britain and Northern Ireland', addressed his letters of credence to the Italian Royal Court to the King of Italy. However, as King of Ireland, on the advice of the Irish Government of Eamon de Valera, he addressed his letters of credence to the King of Italy and Emperor of Abyssinia; this is because Éire, unlike the United Kingdom, recognizes the King of Italy's imperial title.
Another dispute revolved around the titles of the British and Irish heads of state. Britain took the Irish President's title, 'President of Ireland' to imply a claim to be the head of state of all of Ireland (not merely the twenty-six county Republic of Ireland, but of Northern Ireland also). As a result, on the advice of Her Majesty's Government, Queen Elizabeth II formally addresses letters of credence to the Irish President by name (e.g., 'President Robinson', 'President McAleese'). This compromise was agreed to by the governments of both states.
Until a head of state formally accepts a letter of credence, an ambassador-designate does not formally assume diplomatic status, including the possession of diplomatic immunity. In many states, a minister in the government or in cabinet will 'attend' (that is, be present with) the head of state at the actual ceremony, to symbolise the fact that the acceptance or rejection of the letter of credence is on the basis of government advice.
Given that a head of state sends a letter of credence to a fellow a head of state, the corollary is true also. The person who sends a letter of credence is by implication a head of state (unless they are acting as the representative of a head of state (for example, a governor-general). This became a source of dispute in Éire from December 1936 to the declaration of the Republic of Ireland in 1949, when from 1937 to 1949 Ireland had both a 'President of Ireland' and King George VI, who had been proclaimed 'King of Ireland'. Given that under the External Relations Act the role of representing Ireland in the accreditation of ambassadors belonged to the 'King of Ireland' on the advice of the Irish Government, between those years the Irish head of state was unambiguously the 'King of Ireland'. After April 1949, when that role was given by law to the President of Ireland, the President became Irish head of state.