The Deferred Payment Letter of Credit is essential in international trade financing where buyers require extended payment terms while ensuring sellers receive a secure payment commitment. This document is particularly relevant when conducting business under German jurisdiction, combining the security of a traditional letter of credit with deferred payment features. It is commonly used in large-scale commercial transactions where the buyer needs time to generate funds from the sale of goods or manage cash flow effectively. The document includes specific terms regarding payment timing, document presentation requirements, and bank obligations, all structured in compliance with German banking laws and UCP 600 guidelines. It serves as a critical tool for trade finance, offering protection to both parties while facilitating international commerce through structured payment arrangements.
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1. Issuing Bank Details: Complete name, address, and reference numbers of the issuing bank
2. Date and Place of Issue: When and where the Letter of Credit was issued
3. LC Number: Unique identification number of the Letter of Credit
4. Beneficiary Details: Complete name and address of the beneficiary (seller/exporter)
5. Applicant Details: Complete name and address of the applicant (buyer/importer)
6. Currency and Amount: Currency denomination and total amount of the Letter of Credit
7. Available With/By: Specification of nominated bank and manner of availability
8. Deferred Payment Terms: Specific terms of the deferred payment, including maturity date or calculation method
9. Expiry Date and Place: When and where the Letter of Credit expires
10. Shipment Terms: Latest shipment date and partial shipment/transhipment conditions
11. Required Documents: Detailed list of documents required for presentation
12. Additional Conditions: Any special conditions or requirements
13. Charges: Distribution of banking charges between parties
1. Transferability Clause: Include when the Letter of Credit needs to be transferable to a second beneficiary
2. Revolving Terms: Include when the Letter of Credit is revolving rather than single-use
3. Back-to-Back Provisions: Include when the Letter of Credit may be used as collateral for another LC
4. Red Clause: Include when advance payment provisions are required
5. Green Clause: Include when warehouse storage provisions are needed
6. Confirmation Instructions: Include when confirmation by another bank is requested
1. Document Requirements Schedule: Detailed specifications for each required document including format and content requirements
2. Goods Description Schedule: Detailed description of the goods, including specifications, quantities, and unit prices
3. Payment Schedule: Detailed breakdown of payment terms, including calculation methods and specific due dates
4. UCP 600 Exclusions: List of any UCP 600 articles that are expressly excluded or modified
5. Bank Instructions Appendix: Specific instructions for handling documents and payments by participating banks
Authors
Relevant legal definitions
Clauses
Relevant Industries
Manufacturing
International Trade
Banking and Financial Services
Import/Export
Commodities Trading
Automotive
Electronics
Heavy Industry
Consumer Goods
Chemical Industry
Agriculture
Textiles
Mining and Resources
Construction Materials
Relevant Teams
Legal
Finance
Treasury
International Trade Operations
Risk Management
Procurement
Supply Chain
Documentary Credits
Trade Finance
Commercial Banking
Corporate Banking
Relevant Roles
Trade Finance Manager
International Business Development Manager
Chief Financial Officer
Treasury Manager
Import/Export Manager
Trade Operations Manager
Credit Manager
Banking Relationship Manager
Documentary Credits Specialist
International Trade Specialist
Finance Director
Supply Chain Manager
Procurement Manager
Corporate Banking Officer
Risk Management Officer
Commercial Banking Manager
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