The Letter of Credit (LC) Without Recourse is a critical financial instrument used in international trade transactions under Australian jurisdiction. This document type is particularly valuable when sellers require maximum payment security while ensuring they cannot be held liable for buyer default after receiving payment. The LC Without Recourse explicitly states that once the issuing bank has paid the beneficiary against compliant documents, it cannot seek reimbursement from the beneficiary even if the applicant fails to reimburse the bank. This instrument is commonly used in high-value international transactions, especially in commodity trading, manufacturing exports, and situations where sellers have strong negotiating positions. The document must comply with Australian banking regulations, international trade practices, and the globally recognized UCP 600 rules, while specifically addressing the unique aspects of Australian trade finance requirements and legal framework.
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1. Letter Date and Reference Number: Opening with date and unique LC reference number
2. Issuing Bank Details: Full details of the issuing bank including address and contact information
3. Beneficiary Details: Complete name and address of the beneficiary
4. Applicant Details: Complete name and address of the applicant (buyer)
5. Credit Amount and Currency: Specification of the LC amount and currency
6. Type and Nature of Credit: Clearly stating it's an irrevocable LC without recourse
7. Availability and Expiry: How and where the credit is available, and expiry date
8. Shipment Terms: Latest shipment date and shipment details
9. Document Requirements: List of required documents for presentation
10. Payment Terms: Specific conditions and timing of payment
11. Special Conditions: Any additional terms or conditions specific to this LC
12. Governing Law Statement: Confirmation that Australian law governs the LC
13. Bank Authorization: Authorized signatures and bank stamps
1. Transferability Clause: Include when the LC needs to be transferable to another beneficiary
2. Revolving Terms: Include for revolving LCs specifying reinstatement conditions
3. Red Clause Provisions: Include when advance payment provisions are required
4. Back-to-Back Provisions: Include when the LC is part of a back-to-back arrangement
5. Partial Shipment Terms: Include when partial shipments are allowed or prohibited
6. Transhipment Terms: Include when specific transhipment conditions apply
1. Document Checklist: Detailed list of required documents with specific format requirements
2. Commercial Invoice Requirements: Specific requirements for commercial invoice presentation
3. Transport Document Requirements: Detailed specifications for bills of lading or other transport documents
4. Insurance Document Requirements: Specifications for insurance documentation if required
5. Bank Code Authentication: Authentication codes and verification procedures
6. Fee Schedule: Breakdown of all applicable bank charges and fees
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Commodities Trading
Agriculture and Food
Mining and Resources
Retail and Consumer Goods
Energy and Utilities
Automotive
Textiles and Apparel
Electronics and Technology
Chemical and Pharmaceuticals
Relevant Teams
Trade Finance
International Banking
Risk Management
Legal
Compliance
Treasury
Global Operations
Documentary Credits
Trade Operations
Credit Administration
International Sales
Finance
Relevant Roles
Trade Finance Manager
International Business Director
Export Finance Specialist
Documentary Credits Officer
Treasury Manager
Global Trade Operations Manager
Risk Management Officer
Trade Services Manager
International Sales Director
Compliance Officer
Credit Risk Manager
Banking Operations Manager
Chief Financial Officer
Import/Export Coordinator
Trade Documentation Specialist
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