Document background
The Fixed Letter of Credit is a fundamental instrument in international trade finance, providing payment security and risk mitigation for cross-border transactions. This document is typically used when parties seek a secure, irrevocable payment method with a predetermined fixed amount, particularly in international trade scenarios where trust needs to be established between unfamiliar trading partners. The Fixed Letter of Credit, governed by Danish law, incorporates both local financial regulations and international banking practices (UCP 600), making it particularly suitable for transactions involving Danish entities or those choosing Danish jurisdiction. It contains detailed specifications about payment conditions, required documentation, shipping terms, and compliance requirements, serving as a binding commitment from the issuing bank to pay the beneficiary upon presentation of compliant documents.
