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.
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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
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
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
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
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