Document background
The Usance LC is a crucial trade finance instrument used when buyers require extended payment terms while ensuring sellers receive a secure payment commitment. This document type is particularly relevant in international trade scenarios where the buyer needs time to sell the goods before making payment, or where industry practice involves credit periods. The Usance LC, governed by Danish law, provides a bank-backed guarantee of payment at a specified future date, typically ranging from 30 to 180 days after shipment or document presentation. It incorporates specific requirements under Danish jurisdiction while adhering to international banking practices (UCP 600), making it a robust instrument for managing credit risks in cross-border trade. The document details payment terms, required documentation, shipping conditions, and compliance requirements, serving as a critical tool for trade finance operations.
