A Direct Pay Letter of Credit is a fundamental trade finance instrument used to facilitate secure international trade transactions in Indonesia. This document is typically employed when parties seek a reliable payment mechanism that provides security to both the seller (beneficiary) and buyer (applicant). The letter of credit represents a bank's irrevocable commitment to pay the beneficiary upon presentation of compliant documents, subject to Indonesian banking regulations and international standards (UCP 600). It is particularly crucial in cross-border transactions where parties may not have established trading relationships or where local regulations require formal banking channels for foreign exchange transactions. The document includes detailed specifications of required documents, payment terms, and conditions, while ensuring compliance with Bank Indonesia regulations and Indonesian foreign exchange laws.
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1. Letter Reference Number: Unique identification number of the L/C
2. Date of Issuance: Date when the L/C is issued
3. L/C Type Declaration: Clear statement that this is an irrevocable Direct Pay Letter of Credit
4. Issuing Bank Details: Complete name and address of the issuing bank
5. Beneficiary Details: Full name and address of the beneficiary
6. Applicant Details: Full name and address of the applicant/buyer
7. Currency and Amount: L/C amount in figures and words, including currency
8. Expiry Details: Expiry date and place of the L/C
9. Payment Terms: Specification of payment terms including timing of payment
10. Required Documents: Detailed list of documents required for payment
11. Goods/Services Description: Detailed description of the underlying goods or services
12. Shipment/Delivery Terms: Shipping or delivery details including deadlines if applicable
13. Governing Law: Statement that the L/C is governed by Indonesian law and UCP 600
14. Authorization: Authorized signatures and bank stamps
1. Advising Bank Details: Include when a separate advising bank is involved in the transaction
2. Confirmation Instructions: Include when confirmation by another bank is requested
3. Transhipment Terms: Include when shipment involves multiple stages or modes of transport
4. Partial Shipment Terms: Include when partial shipments are allowed or prohibited
5. Special Conditions: Include when there are additional requirements or conditions specific to the transaction
6. Transfer Provisions: Include when the L/C is transferable
7. Insurance Requirements: Include when specific insurance requirements need to be detailed
8. Bank Charges Distribution: Include when there's a specific arrangement for bank charges allocation
1. Document Checklist: Detailed checklist of all required documents with specific requirements for each
2. Commercial Invoice Requirements: Specific requirements and format for commercial invoices
3. Transport Document Requirements: Detailed requirements for bills of lading or other transport documents
4. Bank Contact Details: Complete contact information for all banks involved in the transaction
5. Fee Schedule: Breakdown of all applicable bank charges and fees
6. Amendment Form: Standard form for requesting amendments to the L/C
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Agriculture and Commodities
Mining and Resources
Textile and Garments
Electronics and Technology
Oil and Gas
Consumer Goods
Shipping and Logistics
Import/Export
Wholesale Trade
Relevant Teams
Legal
Finance
International Trade
Treasury
Compliance
Risk Management
Trade Operations
Banking Operations
Procurement
Supply Chain
Credit Administration
Documentary Credits
Relevant Roles
Trade Finance Manager
International Banking Officer
Documentary Credits Specialist
Import/Export Manager
Treasury Manager
Trade Operations Officer
Compliance Officer
Credit Risk Manager
Banking Relationship Manager
Chief Financial Officer
Finance Director
International Trade Specialist
Supply Chain Manager
Procurement Manager
Legal Counsel
Banking Operations Manager
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