The Restricted Letter of Credit is a crucial document in international trade finance, particularly under German jurisdiction. It is used when parties require a secure payment method but wish to limit the negotiation of the credit to specific banks for enhanced security and control. This document type combines the security of a standard letter of credit with additional restrictions on which banks can negotiate the documents and make payment. The Restricted Letter of Credit must comply with German banking regulations, particularly the Kreditwesengesetz (Banking Act) and relevant EU regulations, while also following international banking practices under UCP 600. It typically includes detailed specifications about the transaction, required documents, payment terms, and the specific banks authorized to handle the credit. This instrument is particularly valuable in complex international trade transactions where parties seek additional security measures and controlled banking channels.
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1. Bank Details and Reference: Issuing bank's details, Letter of Credit number, and other reference information
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. Currency and Amount: Specification of the currency and the exact amount of the Letter of Credit
5. Expiry Date and Place: Clear statement of when and where the Letter of Credit expires
6. Form of Credit: Specification that this is a restricted Letter of Credit and its characteristics
7. Available With: Details of the bank with which the credit is available and manner of availability
8. Required Documents: Detailed list of documents that must be presented for payment
9. Shipment Terms: Information about shipment, including latest shipment date and partial shipments if applicable
10. Presentation Period: Time period within which documents must be presented after shipment
11. Instructions for Bank: Specific instructions for handling documents and payment
12. Governing Law and UCP: Reference to German law and UCP 600 applicability
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 required or prohibited
3. Special Conditions: Include when there are additional requirements or conditions beyond standard terms
4. Back-to-Back Provisions: Include when the Letter of Credit is part of a back-to-back arrangement
5. Red Clause: Include when advance payment provisions are required
6. Green Clause: Include when warehouse storage provisions are needed
7. Revolving Terms: Include when the Letter of Credit is to revolve in value or time
1. Schedule A - Document Requirements: Detailed specifications for each required document including format and content requirements
2. Schedule B - Commercial Invoice Requirements: Specific requirements for the format and content of commercial invoices
3. Schedule C - Transport Document Requirements: Detailed requirements for bills of lading or other transport documents
4. Appendix 1 - Authorized Signatures: Specimen signatures of authorized signatories if required
5. Appendix 2 - Special Instructions: Any additional technical or operational instructions for document handling
6. Appendix 3 - Fee Schedule: Detailed breakdown of banking charges and fees applicable
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking & Financial Services
International Trade
Import/Export
Manufacturing
Wholesale & Distribution
Shipping & Logistics
Commodities Trading
Retail
Agriculture
Energy
Mining
Textiles
Automotive
Relevant Teams
Trade Finance
International Banking
Documentary Credits
Export Finance
Import Finance
Treasury
Risk Management
Compliance
Legal
Commercial Banking
Operations
Corporate Banking
Relevant Roles
Trade Finance Manager
International Banking Officer
Documentary Credits Specialist
Export Finance Manager
Import Finance Manager
Trade Operations Manager
Corporate Banking Manager
Treasury Manager
Financial Controller
Compliance Officer
Risk Manager
Commercial Banking Officer
International Trade Specialist
Supply Chain Finance Manager
Chief Financial Officer
Banking Relationship Manager
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