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Lc For Payment for Indonesia

Lc For Payment Template for Indonesia

A Letter of Credit for Payment under Indonesian law is a crucial trade finance instrument that provides a secure payment mechanism for international trade transactions. The document is governed by Indonesian banking regulations, particularly Bank Indonesia Regulation No. 5/11/PBI/2003, while also incorporating international standards such as UCP 600. It serves as a bank's irrevocable commitment to pay the beneficiary upon presentation of compliant documents, offering security to both importers and exporters in cross-border transactions. The document includes specific requirements for document presentation, payment terms, and compliance with Indonesian foreign exchange regulations.

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Lc For Payment

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What is a Lc For Payment?

The LC for Payment is a fundamental trade finance instrument used in Indonesian international trade transactions to mitigate payment risks between parties. It is particularly relevant when dealing with new trading partners or in situations where sellers require payment security. The document must comply with Bank Indonesia regulations and typically incorporates UCP 600 rules, making it internationally recognized while maintaining compliance with local requirements. The LC for Payment specifies the conditions for payment, required documents, timeframes, and other critical terms that protect both the buyer's and seller's interests. It is essential for businesses engaged in import/export activities in Indonesia, especially given the country's significant role in international trade and its specific regulatory requirements for foreign exchange transactions.

What sections should be included in a Lc For Payment?

1. LC Number and Date: Unique identification number of the LC and date of issuance

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

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

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

5. Currency and Amount: Specified currency and maximum amount of the LC

6. Expiry Date and Place: Validity period of the LC and location where documents must be presented

7. Available With/By: Nominated bank details and method of availability (sight, deferred payment, etc.)

8. Partial Shipments/Transhipment: Whether partial shipments or transhipment is allowed or prohibited

9. Loading/Dispatch From: Port of loading or place of dispatch

10. Port of Discharge: Final destination port or place

11. Latest Date of Shipment: Final date by which shipment must be made

12. Document Requirements: List of required documents for LC negotiation

13. Additional Conditions: Specific terms and conditions applicable to the LC

14. Charges: Specification of which party bears various banking charges

What sections are optional to include in a Lc For Payment?

1. Confirmation Instructions: Used when confirmation by another bank is requested, specifying whether the LC should be confirmed by the advising bank

2. Reimbursement Instructions: Include when specific reimbursement arrangements between banks need to be detailed

3. Special Payment Conditions: Used when there are specific conditions or timing requirements for payment

4. Transfer Provisions: Include when the LC needs to be transferable to another beneficiary

5. Back-to-Back Arrangements: Used when the LC serves as collateral for another LC

6. Green Clause Provisions: Include when advance payment facilities are to be provided

7. Insurance Instructions: Used when specific insurance requirements need to be detailed beyond standard requirements

What schedules should be included in a Lc For Payment?

1. Commercial Invoice Template: Standardized format for the commercial invoice required under the LC

2. Packing List Requirements: Detailed specifications for how goods should be packed and listed

3. Transport Document Requirements: Specific requirements for bills of lading or other transport documents

4. Certificate of Origin Requirements: Format and requirements for origin certification

5. Inspection Certificate Requirements: Details of required inspection certificates and authorized inspectors

6. Product Specifications: Detailed technical specifications of the goods being traded

7. Banking Forms: Standard forms required by the issuing bank for LC processing

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

Indonesia

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions








































Clauses






























Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Agriculture and Commodities

Mining and Resources

Retail and Consumer Goods

Automotive

Electronics and Technology

Textiles and Garments

Oil and Gas

Construction Materials

Chemical Products

Food and Beverage

Relevant Teams

Trade Finance

International Banking

Treasury

Legal and Compliance

Risk Management

Finance Operations

Trade Operations

Documentary Credits

Procurement

Supply Chain

Business Development

Commercial Banking

Relevant Roles

Trade Finance Manager

International Trade Specialist

Import/Export Coordinator

Banking Relations Manager

Finance Director

Treasury Manager

Commercial Banking Officer

Documentary Credits Specialist

Trade Operations Manager

Compliance Officer

Risk Management Officer

Chief Financial Officer

Supply Chain Manager

Procurement Manager

International Business Development Manager

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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