Commercial Letters of Credit are essential instruments in international trade finance, providing security and payment assurance to parties involved in cross-border transactions. Used when there is a need to mitigate risk between buyers and sellers who may not have established business relationships, the Commercial Letter of Credit serves as a bank's irrevocable commitment to pay the seller upon presentation of compliant documents. Under Belgian law, these instruments incorporate both local regulations and international standards, particularly the UCP 600 rules, while complying with EU financial directives. The document is typically used in import-export transactions, large commercial purchases, and international trade deals where parties seek bank-mediated payment security. It contains detailed specifications about the transaction, required documentation, payment terms, and conditions that must be met for the credit to be honored.
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1. Letter Reference and Date: Unique reference number and date of issuance of the Letter of Credit
2. Issuing Bank Details: Complete name and address of the issuing bank
3. Beneficiary Details: Full name and address of the beneficiary (seller/exporter)
4. Applicant Details: Full name and address of the applicant (buyer/importer)
5. Credit Amount and Currency: Specified amount and currency of the Letter of Credit
6. Type and Form of Credit: Specification that this is an irrevocable commercial Letter of Credit
7. Expiry Date and Place: Clear statement of expiry date and location for document presentation
8. Available With/By: Details of how and where the credit is available (payment, acceptance, or negotiation)
9. Partial Shipments/Transhipment: Whether partial shipments or transhipment are allowed or prohibited
10. Required Documents: Detailed list of all required documents for presentation
11. Shipment Terms: Latest shipment date and shipping details including port of loading/discharge
12. Description of Goods/Services: Precise description of the goods or services being traded
13. Presentation Period: Time period within which documents must be presented after shipment
1. Transferability Clause: Include when the Letter of Credit needs to be transferable to another beneficiary
2. Confirmation Instructions: Include when confirmation by another bank is requested
3. Back-to-Back Provisions: Include for back-to-back Letter of Credit arrangements
4. Red Clause Provisions: Include when advance payment facilities are required
5. Revolving Credit Terms: Include for revolving Letters of Credit that reinstate automatically
6. Special Payment Terms: Include when deferred payment or acceptance terms are applicable
7. Insurance Requirements: Include when specific insurance requirements exceed standard coverage
1. Schedule A - Commercial Invoice Requirements: Detailed requirements for the format and content of commercial invoices
2. Schedule B - Transport Document Requirements: Specific requirements for bills of lading or other transport documents
3. Schedule C - Insurance Document Requirements: Requirements for insurance certificates or policies
4. Schedule D - Additional Document Requirements: Requirements for certificates of origin, inspection certificates, or other specific documents
5. Appendix 1 - SWIFT Format Guidelines: Standard format requirements for SWIFT MT 700 series messages
6. Appendix 2 - Document Presentation Checklist: Checklist for beneficiary to ensure complete document presentation
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Import/Export
Retail
Commodities Trading
Agriculture
Energy
Pharmaceuticals
Automotive
Electronics
Textiles
Heavy Industry
Chemical Industry
Construction
Relevant Teams
Finance
International Trade
Treasury
Legal
Compliance
Risk Management
Procurement
Supply Chain
Banking Operations
Trade Operations
Documentary Credits
International Business Development
Relevant Roles
Chief Financial Officer
Trade Finance Manager
Import Manager
Export Manager
Treasury Manager
Documentary Credits Specialist
International Trade Specialist
Banking Relations Manager
Financial Controller
Compliance Officer
Legal Counsel
Credit Risk Manager
Supply Chain Manager
Procurement Manager
Banking Operations Manager
International Business Development Manager
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