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Sight Lc And Usance Lc for Hong Kong

Sight Lc And Usance Lc Template for Hong Kong

A Letter of Credit document governed by Hong Kong law is a formal banking instrument that provides payment security in international trade transactions. It represents an irrevocable undertaking by a bank to pay the beneficiary (seller) a specified amount upon presentation of compliant documents as stipulated in the LC terms. The document incorporates requirements from Hong Kong's Banking Ordinance, international UCP 600 rules, and relevant commercial laws, providing a robust framework for both sight (immediate) and usance (deferred) payment arrangements in cross-border trade.

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What is a Sight Lc And Usance Lc?

Sight LC and Usance LC documents are essential banking instruments used in international trade transactions where parties seek secure payment methods. These documents, governed by Hong Kong law and incorporating UCP 600 rules, serve as a bank's commitment to pay the seller upon presentation of compliant documents. While Sight LCs provide immediate payment upon document verification, Usance LCs offer deferred payment terms, typically 30, 60, or 90 days after document presentation. The document structure reflects Hong Kong's status as a major international financial center, incorporating both local banking regulations and international banking practices. It is particularly crucial for transactions where parties need bank-mediated payment security, whether for immediate or future settlement, and includes detailed specifications about document requirements, payment terms, and compliance conditions.

What sections should be included in a Sight Lc And Usance Lc?

1. LC Number and Type: Unique identification number of the LC and specification of whether it's a Sight or Usance LC

2. Issuing Bank Details: Complete name and address of the issuing bank

3. Applicant Details: Full name, address, and contact information of the buyer/applicant

4. Beneficiary Details: Full name, address, and contact information of the seller/beneficiary

5. Date of Issue: The date when the LC is issued

6. Date and Place of Expiry: Expiration date and location where documents must be presented

7. Currency and Amount: Currency denomination and maximum amount of the credit

8. Available With/By: Specifies where and how the credit is available (payment, acceptance, or negotiation)

9. Required Documents: Detailed list of all documents required for presentation

10. Shipment Terms: Latest shipment date and any partial shipment/transhipment conditions

11. Description of Goods/Services: Detailed description of the goods or services being traded

12. Payment Terms: Specific conditions for payment including timing and method

13. Bank Charges: Allocation of banking charges between parties

What sections are optional to include in a Sight Lc And Usance Lc?

1. Transferability Clause: Include when the LC needs to be transferable to a second beneficiary

2. Confirmation Instructions: Include when confirmation from another bank is required

3. Red Clause: Include when advance payment to the beneficiary is permitted

4. Revolving Terms: Include for revolving LCs that automatically renew

5. Back-to-Back Provisions: Include when the LC is part of a back-to-back arrangement

6. Draft Requirements: Specific for Usance LCs, detailing requirements for time drafts

7. Deferred Payment Terms: For Usance LCs, specifying the extended payment terms

8. Insurance Requirements: Include when specific insurance coverage needs to be specified

9. Special Conditions: Any additional terms specific to the transaction

What schedules should be included in a Sight Lc And Usance Lc?

1. Schedule A - Document Requirements: Detailed checklist of required documents and their specific requirements

2. Schedule B - Goods Specification: Detailed technical specifications of the goods

3. Schedule C - Price Schedule: Breakdown of prices if multiple items or shipments are involved

4. Schedule D - Shipping Schedule: Timeline for shipments if multiple deliveries are involved

5. Appendix 1 - Standard Banking Forms: Standard forms required by the issuing bank

6. Appendix 2 - UCP 600 References: Relevant UCP 600 articles applicable to the LC

7. Appendix 3 - Amendment Format: Standard format for any future amendments to the LC

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Hong Kong

Publisher

Ƶ

Document Type

Authorization Form

Cost

Free to use
Relevant legal definitions








































Clauses






























Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Import/Export

Retail

Wholesale

Commodities Trading

Shipping and Logistics

Agriculture

Electronics

Textiles

Heavy Industry

Consumer Goods

Raw Materials

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Credit Risk

Compliance

Legal

Operations

Treasury

Corporate Banking

Trade Operations

Financial Control

International Trade

Relevant Roles

Trade Finance Manager

International Banking Officer

Documentary Credits Specialist

Import/Export Manager

Treasury Manager

Trade Operations Officer

Relationship Manager

Credit Risk Officer

Compliance Officer

Banking Operations Manager

Trade Finance Analyst

Letter of Credit Specialist

Corporate Banking Manager

International Trade Specialist

Finance Director

Chief Financial Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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