Usance Lc for Switzerland

Usance Lc Template for Switzerland

A Usance Letter of Credit is a specialized financial instrument governed by Swiss law that provides for deferred payment terms in international trade transactions. This document serves as a bank's commitment to pay the seller (beneficiary) a specified amount after a predetermined period following the presentation of compliant documents. The document incorporates provisions from Swiss banking regulations, the UCP 600 international rules, and relevant Swiss commercial law, particularly the Swiss Code of Obligations. It details the payment terms, document requirements, and conditions that must be met for the payment to be effected.

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What is a Usance Lc?

A Usance Letter of Credit (LC) is essential in international trade transactions where buyers require extended payment terms while ensuring sellers receive a secure payment commitment. This document type is particularly relevant under Swiss law, which provides a robust legal framework for international banking transactions. The Usance LC includes detailed specifications about payment terms, typically ranging from 30 to 180 days after document presentation or shipment date, and incorporates both international banking practices (UCP 600) and Swiss regulatory requirements. It's commonly used when importers need time to receive and sell goods before making payment, while exporters benefit from a bank's payment guarantee. The document specifies all required shipping documents, payment conditions, and compliance requirements, making it a crucial tool in facilitating international trade while managing risk for all parties involved.

What sections should be included in a Usance Lc?

1. Issuing Bank Details: Complete identification and contact information of the issuing bank

2. Beneficiary Details: Full name and address of the seller/exporter (beneficiary)

3. Applicant Details: Full name and address of the buyer/importer (applicant)

4. LC Number and Date: Unique letter of credit reference number and date of issuance

5. Currency and Amount: Currency denomination and total amount of the letter of credit

6. Usance Period: Specific deferred payment terms (e.g., 60 days, 90 days from bill of lading date)

7. Expiry Date and Place: Final date and location for document presentation

8. Required Documents: Detailed list of all required shipping and commercial documents

9. Shipment Terms: Latest shipment date, partial shipment/transhipment permissions, and INCOTERMS

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

11. Description of Goods: Detailed description of the merchandise being traded

12. Governing Law and Jurisdiction: Specification of Swiss law as governing law and jurisdiction details

What sections are optional to include in a Usance Lc?

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

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

3. Confirmation Instructions: Include when confirmation by another bank is required

4. Special Payment Conditions: Include when there are specific requirements for release of payment

5. Insurance Requirements: Include when specific insurance coverage details need to be specified

6. Additional Conditions: Include when there are special requirements or conditions specific to the transaction

What schedules should be included in a Usance Lc?

1. Schedule A - Document Requirements: Detailed checklist of required documents with specific format requirements

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

3. Schedule C - Payment Schedule: If multiple drawings are allowed, detailed schedule of payments

4. Appendix 1 - Document Formats: Sample formats for required documents

5. Appendix 2 - Bank Instructions: Specific instructions for document handling and payment processing

6. Appendix 3 - INCOTERMS Definition: Detailed explanation of the applicable INCOTERMS rules

Authors

Alex Denne

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

Cost

Free to use

Relevant legal definitions

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Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Import/Export

Logistics and Supply Chain

Commodities Trading

Retail

Wholesale

Agriculture

Mining

Energy

Textiles

Electronics

Automotive

Relevant Teams

Trade Finance

International Banking

Legal

Compliance

Treasury

Risk Management

Operations

Documentary Credits

Commercial Banking

Supply Chain

Finance

International Trade

Relevant Roles

Trade Finance Manager

International Business Development Manager

Import/Export Coordinator

Treasury Manager

Finance Director

Trade Operations Officer

Documentary Credits Specialist

Compliance Officer

Risk Manager

Commercial Banking Officer

Supply Chain Manager

Chief Financial Officer

Banking Relationship Manager

International Trade Specialist

Legal Counsel

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Lc Document

A Swiss law-governed Letter of Credit document providing bank payment guarantee in international trade transactions, combining Swiss banking reliability with international standards.

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