The LC Without Recourse is a specialized financial instrument essential for international trade transactions where the beneficiary seeks maximum payment security. This document type is particularly relevant when dealing with cross-border transactions under Indian jurisdiction, where exporters want to eliminate the risk of future payment recalls. The LC Without Recourse differs from standard Letters of Credit as it explicitly waives the bank's right to reclaim payment from the beneficiary once documents are accepted, even if the applicant defaults. This arrangement is governed by Indian banking laws, Reserve Bank of India guidelines, and international practices (UCP 600), making it a robust instrument for international trade finance. The document typically includes detailed terms about payment conditions, document requirements, shipping terms, and explicit without recourse provisions.
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1. Letter Reference and Date: Unique LC reference number and date of issuance
2. Form of Documentary Credit: Specification that this is an irrevocable LC without recourse
3. Applicant Details: Full name and address of the party requesting the LC (typically the buyer)
4. Beneficiary Details: Full name and address of the party in whose favor the LC is issued (typically the seller)
5. Issuing Bank Details: Full name and address of the bank issuing the LC
6. Amount and Currency: The credit amount and currency, stated in both figures and words
7. Expiry Details: Expiry date and place for presentation of documents
8. Without Recourse Declaration: Clear statement of the without recourse nature of the credit
9. Payment Terms: Specification of when and how payment will be made (at sight, deferred, etc.)
10. Required Documents: Detailed list of all documents required for presentation
11. Shipment Terms: Details of shipment including latest shipment date and partial shipments status
12. Special Conditions: Any additional terms or conditions specific to this LC
1. Advising Bank Details: Include when a separate advising bank is involved in the transaction
2. Confirming Bank Details: Include when the LC requires confirmation from another bank
3. Transferability Clause: Include if the LC is transferable to other beneficiaries
4. Red Clause: Include if advance payment is permitted under the LC
5. Green Clause: Include if warehouse storage-related advances are permitted
6. Back-to-Back Provisions: Include if the LC can be used as collateral for another LC
7. Revolving Credit Terms: Include if the LC is revolving in value or time
1. Schedule A - Document Requirements: Detailed checklist of required documents and their specifications
2. Schedule B - Goods Description: Detailed description of the goods or services covered by the LC
3. Schedule C - Payment Schedule: If payments are to be made in installments or against multiple shipments
4. Appendix 1 - UCP 600 Compliance: Specific references to applicable UCP 600 articles
5. Appendix 2 - SWIFT Format: SWIFT message format details if applicable
6. Appendix 3 - Amendment Format: Standard format for future amendments to the LC
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking & Financial Services
International Trade
Manufacturing
Import/Export
Shipping & Logistics
Commodities Trading
Textile Industry
Agricultural Products
Heavy Machinery
Oil & Gas
Mining
Chemicals & Pharmaceuticals
Relevant Teams
Trade Finance
International Banking
Legal & Compliance
Risk Management
Treasury Operations
Documentary Credits
Export Operations
Import Operations
Credit Control
Banking Operations
Relevant Roles
Trade Finance Manager
International Banking Officer
Export Finance Specialist
Import Operations Manager
Documentary Credits Manager
Compliance Officer
Treasury Manager
Trade Operations Analyst
Risk Management Officer
Legal Counsel
Banking Relationship Manager
Credit Risk Officer
Trade Documentation Specialist
Financial Controller
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