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Lc Without Recourse for South Africa

Lc Without Recourse Template for South Africa

A Letter of Credit Without Recourse is a specialized financial instrument governed by South African law and international banking practices, particularly the UCP 600. This document represents an irrevocable undertaking by a bank to pay the beneficiary a specified amount upon presentation of compliant documents, with the unique feature that the bank cannot seek reimbursement from the beneficiary if the applicant defaults. The document incorporates South African banking regulations, exchange control requirements, and international trade practices, making it particularly suitable for cross-border transactions where parties seek enhanced payment security while protecting the beneficiary's interests.

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Lc Without Recourse

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What is a Lc Without Recourse?

The LC Without Recourse is a critical trade finance instrument used when parties seek secure payment methods in international trade transactions while providing additional protection to the beneficiary. This document type is particularly relevant in the South African context, where it must comply with the country's Banking Act, Exchange Control Regulations, and international banking standards. The LC Without Recourse explicitly states that the issuing bank cannot seek reimbursement from the beneficiary even if the applicant fails to reimburse the bank, making it especially attractive to exporters. It typically includes detailed specifications about payment terms, document requirements, shipping conditions, and compliance requirements under South African law. This instrument is commonly used in high-value international trade transactions, particularly in sectors such as mining, agriculture, and manufacturing, where South Africa has significant trade volumes.

What sections should be included in a Lc Without Recourse?

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

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

3. Applicant Details: Full name, address, and contact information of the party requesting the LC (usually the buyer)

4. Beneficiary Details: Full name, address, and contact information of the party in whose favor the LC is issued (usually the seller)

5. Currency and Amount: Specified currency and amount of the LC in both figures and words

6. Expiry Date and Place: Clear statement of when and where the LC expires

7. Non-Recourse Declaration: Explicit statement that the LC is without recourse to the beneficiary

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

9. Documentary Requirements: Specific list of documents required for presentation

10. Shipment Terms: Details of goods, shipping requirements, and latest shipment date

11. Presentation Period: Time period within which documents must be presented after shipment

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

What sections are optional to include in a Lc Without Recourse?

1. Advising Bank Details: Include when an advising bank is used to authenticate the LC in the beneficiary's country

2. Confirming Bank Details: Include when a confirming bank is adding its confirmation to the LC

3. Transfer Conditions: Include if the LC is transferable to another beneficiary

4. Special Payment Conditions: Include when there are specific payment terms such as deferred payment or acceptance

5. Red Clause Provisions: Include if advance payment provisions are to be included

6. Back-to-Back Provisions: Include if the LC can be used as collateral for another LC

7. Green Clause Provisions: Include if provisions for storage of goods are required

What schedules should be included in a Lc Without Recourse?

1. Schedule A - Document Requirements: Detailed list and format of all required documents including commercial invoice, transport documents, insurance documents, and certificates

2. Schedule B - Goods Description: Detailed description of goods including specifications, quantity, unit price, and total value

3. Schedule C - Special Instructions: Any additional instructions regarding document preparation, shipping marks, or special requirements

4. Appendix 1 - UCP 600 Reference: Specific UCP 600 articles applicable to this LC

5. Appendix 2 - Bank Charges Schedule: Breakdown of banking charges and commission applicable 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

South Africa

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions








































Clauses






























Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Commodities Trading

Retail

Mining

Agriculture

Logistics and Transportation

Energy

Construction

Textile Industry

Automotive

Relevant Teams

Trade Finance

International Banking

Credit Risk

Legal and Compliance

Treasury

Operations

Documentary Credits

Global Transaction Banking

Trade Operations

Export Finance

Import Finance

Financial Control

Supply Chain Finance

Relevant Roles

Trade Finance Manager

International Trade Specialist

Documentary Credits Officer

Export Finance Manager

Import Finance Manager

Trade Operations Manager

Credit Risk Officer

Banking Relationship Manager

Treasury Manager

Financial Controller

Compliance Officer

Trade Documentation Specialist

Letter of Credit Specialist

Global Transaction Banking Officer

Supply Chain Finance Manager

Chief Financial Officer

Export Sales Manager

Import Operations 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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