The Restricted Letter of Credit serves as a crucial financial instrument in international trade, providing security and payment assurance while maintaining specific controls over the payment conditions. Used extensively in Canadian cross-border transactions, this document type incorporates restrictions that protect the applicant's interests by specifying precise conditions that must be met before payment can be released. The document is governed by Canadian federal banking laws, particularly the Bank Act and Bills of Exchange Act, while also adhering to international banking practices under UCP 600. Restricted Letters of Credit are particularly valuable when parties need enhanced control over the payment process, such as in large-value transactions, complex international shipments, or when dealing with new trading partners.
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1. Bank Details and Reference Number: Issuing bank's details, letter of credit number, and date of issuance
2. Beneficiary Information: Complete name and address of the party in whose favor the letter of credit is issued
3. Applicant Information: Complete name and address of the party requesting the letter of credit
4. Credit Amount and Currency: Specific amount and currency of the letter of credit, including whether it's exact or maximum amount
5. Expiry Date and Place: Clear statement of when and where the letter of credit expires
6. Available With/By: Specification of how the credit is available (sight, deferred payment, acceptance, or negotiation)
7. Restriction Conditions: Specific restrictions and conditions that must be met for the credit to be honored
8. Required Documents: Detailed list of documents that must be presented for drawing under the credit
9. Presentation Terms: Timeframe and conditions for document presentation
10. Governing Law and Rules: Statement of applicable law and rules (typically UCP 600)
1. Transferability Clause: Include when the credit needs to be transferable to another beneficiary
2. Revolving Conditions: Include when the credit is revolving, specifying reinstatement conditions
3. Red Clause: Include when advance payments are permitted before document presentation
4. Green Clause: Include when warehouse storage-related advances are permitted
5. Partial Shipments/Drawings: Include when addressing whether partial shipments or drawings are permitted
6. Special Instructions: Include when there are unique handling or processing requirements
1. Schedule A - Document Presentation Form: Standard form for presenting documents under the letter of credit
2. Schedule B - Drawing Certificate Template: Template for beneficiary's drawing certificate
3. Schedule C - Description of Goods/Services: Detailed description of the underlying goods or services
4. Appendix 1 - Special Handling Instructions: Any special instructions for document handling or presentation
5. Appendix 2 - Bank Contact Details: Complete contact information for relevant bank departments
Relevant legal definitions
Clauses
Relevant Industries
Banking & Financial Services
International Trade
Manufacturing
Import/Export
Retail
Commodities Trading
Agriculture
Mining
Energy
Construction
Shipping & Logistics
Wholesale Distribution
Relevant Teams
Trade Finance
International Banking
Treasury
Credit Operations
Global Transaction Services
Commercial Banking
Risk Management
Compliance
Legal
Finance
Supply Chain
Trade Operations
Relevant Roles
Trade Finance Manager
International Banking Officer
Credit Manager
Treasury Manager
Import/Export Manager
Trade Operations Officer
Documentary Credits Specialist
Global Transaction Banking Officer
Compliance Officer
Risk Manager
Commercial Banking Manager
International Trade Specialist
Chief Financial Officer
Financial Controller
Supply Chain Manager
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