Document background
The Non-Negotiable Letter of Credit is a fundamental trade finance instrument used in international commerce when parties seek a secure payment method with restricted transferability. This document is particularly relevant in Hong Kong's business environment, where it facilitates trade while providing security to both buyers and sellers. It is commonly used when the buyer's bank provides payment assurance to the seller, but the parties want to ensure that the payment rights remain with the original beneficiary only. The document includes crucial details such as payment terms, document requirements, shipping conditions, and compliance criteria. Under Hong Kong jurisdiction, these letters of credit are governed by local banking regulations and international standards like UCP 600, making them particularly suitable for transactions involving Hong Kong-based entities or cross-border trade with Asian partners. The non-negotiable nature specifically prevents the transfer of payment rights, providing additional control and security in the transaction.
