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Structured Letter Of Credit for Indonesia

Structured Letter Of Credit Template for Indonesia

A Structured Letter of Credit under Indonesian law is a specialized banking instrument that provides enhanced financing flexibility while maintaining the security of a traditional letter of credit. This document, governed by Indonesian banking regulations and international trade practices, outlines specific terms for staged payments, multiple drawings, or performance-linked disbursements. It incorporates Bank Indonesia's regulatory requirements while adhering to international UCP 600 standards, making it suitable for complex international trade transactions requiring structured financing solutions.

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What is a Structured Letter Of Credit?

The Structured Letter of Credit is a sophisticated banking instrument used in complex international trade transactions where traditional letters of credit may not provide sufficient flexibility. This document type is particularly relevant in Indonesia's growing international trade sector, where structured financing solutions are increasingly necessary for large-scale or long-term trade arrangements. The document combines the security of a traditional L/C with additional features such as multiple drawing periods, revolving facilities, or performance-linked payments. Subject to Indonesian banking laws and Bank Indonesia regulations, while also adhering to international UCP 600 guidelines, this instrument provides a secure yet flexible method for financing international trade transactions. It is commonly used in large commodity trades, infrastructure projects, or long-term supply contracts where staged payments or specific performance conditions need to be met.

What sections should be included in a Structured Letter Of Credit?

1. Letter of Credit Number and Date: Unique identification number and issuance date of the L/C

2. Issuing Bank Details: Complete name, address, and SWIFT code of the issuing bank

3. Applicant Details: Full name, address, and contact information of the party requesting the L/C

4. Beneficiary Details: Full name, address, and contact information of the party in whose favor the L/C is issued

5. Currency and Amount: Currency denomination and maximum amount of the L/C, both in figures and words

6. Form of Credit: Specification that this is a Structured Letter of Credit and its specific type

7. Availability and Expiry: Terms of availability, expiry date, and place for presentation

8. Drawdown Schedule: Detailed schedule of permitted drawings, including amounts and timing

9. Required Documents: Comprehensive list of documents required for each presentation

10. Payment Terms: Specific conditions and timing of payment upon document presentation

11. Special Conditions: Any specific structured features, including trigger events or performance conditions

12. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and relevant jurisdiction

What sections are optional to include in a Structured Letter Of Credit?

1. Revolving Terms: Include when the L/C is revolving, specifying reinstatement conditions and maximum cycles

2. Transfer Rights: Include when the L/C is transferable, specifying conditions and limitations of transfer

3. Red Clause: Include when advance payment facilities are available, specifying terms and conditions

4. Green Clause: Include when warehouse receipt financing is permitted, detailing requirements

5. Back-to-Back Provisions: Include when the L/C can be used as collateral for another L/C

6. Syndication Terms: Include when multiple banks are involved in providing the L/C facility

7. Islamic Banking Compliance: Include when the L/C needs to comply with Sharia principles

What schedules should be included in a Structured Letter Of Credit?

1. Schedule A - Drawdown Schedule: Detailed timeline and conditions for each permitted drawing under the L/C

2. Schedule B - Fee Schedule: Comprehensive list of all applicable fees, charges, and commission rates

3. Schedule C - Document Checklist: Detailed checklist of required documents for each presentation

4. Schedule D - Special Terms and Conditions: Any structured features, trigger events, or performance conditions in detail

5. Appendix 1 - Form of Drawing Request: Standard format for presenting drawing requests under the L/C

6. Appendix 2 - Form of Document Presentation: Standard format for presenting documents under the L/C

7. Appendix 3 - Form of Bank-to-Bank Reimbursement Authorization: Standard format for reimbursement instructions between banks

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions










Clauses






























Relevant Industries

Banking & Financial Services

International Trade

Import/Export

Manufacturing

Commodities Trading

Shipping & Logistics

Agriculture

Mining & Resources

Oil & Gas

Construction & Infrastructure

Textile Industry

Consumer Goods

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Global Transaction Banking

Treasury

Trade Operations

Compliance

Risk Management

Import/Export

Finance

Legal

Credit Risk

International Business Development

Relevant Roles

Trade Finance Manager

International Banking Officer

Documentary Credits Specialist

Global Transaction Banking Manager

Treasury Manager

Trade Operations Officer

Compliance Officer

Risk Management Officer

Import/Export Manager

Chief Financial Officer

Banking Relationship Manager

Trade Finance Legal Counsel

Financial Controller

Credit Risk Officer

International Business Development Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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