The Usance LC is a crucial trade finance instrument used when buyers require extended payment terms while ensuring sellers receive a secure payment commitment. This document type is particularly relevant in international trade scenarios where the buyer needs time to sell the goods before making payment, or where industry practice involves credit periods. The Usance LC, governed by Danish law, provides a bank-backed guarantee of payment at a specified future date, typically ranging from 30 to 180 days after shipment or document presentation. It incorporates specific requirements under Danish jurisdiction while adhering to international banking practices (UCP 600), making it a robust instrument for managing credit risks in cross-border trade. The document details payment terms, required documentation, shipping conditions, and compliance requirements, serving as a critical tool for trade finance operations.
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Key Requirements PROMPT example:
Usance Lc
I need a Usance LC under Danish law for importing industrial machinery from Germany, with a credit amount of EUR 500,000 and a 90-day payment term from bill of lading date, to be issued by March 2025.
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OR
1. LC Number and Date: Unique identification number of the LC and date of issuance
2. Applicant Details: Full name and address of the party requesting the LC (buyer/importer)
3. Beneficiary Details: Full name and address of the party in whose favor the LC is issued (seller/exporter)
4. Issuing Bank Details: Name and address of the bank issuing the LC
5. Amount and Currency: Credit amount and currency specification
6. Usance Terms: Specific payment terms including the deferred payment period (e.g., 60 days from bill of lading date)
7. Documents Required: List of documents required for presentation
8. Shipment Terms: Details of shipment including latest shipment date and partial shipments status
9. Expiry Date and Place: Final date and location for document presentation
10. Description of Goods: Detailed description of the merchandise being traded
1. Advising Bank: Details of the advising bank, if different from the issuing bank
2. Confirmation Instructions: Used when confirmation is requested from another bank
3. Transhipment Conditions: Include when specific transhipment requirements need to be addressed
4. Insurance Requirements: Specific insurance requirements beyond standard coverage
5. Special Payment Conditions: Any special conditions relating to the usance payment
6. Negotiation Restrictions: Any specific restrictions on negotiation of the LC
1. Commercial Invoice Template: Prescribed format for the commercial invoice
2. Packing List Requirements: Detailed specifications for packing list preparation
3. Transport Document Requirements: Specific requirements for bills of lading or other transport documents
4. Product Specifications: Detailed technical specifications of the goods
5. Inspection Certificate Requirements: Format and requirements for inspection certificates if required
6. Bank Draft Template: Format for the bank draft to be drawn under the LC
Authors
Relevant legal definitions
Acceptance
Advising Bank
Applicant
Banking Day
Beneficiary
Bill of Exchange
Bill of Lading
Complying Presentation
Confirmation
Credit
Danish Business Day
Deferred Payment
Discounting
Documents
Draft
Expiry Date
Force Majeure
Governing Law
Issuing Bank
Latest Shipment Date
Letter of Credit
Maturity Date
Negotiating Bank
Negotiation
Original Documents
Place for Presentation
Presentation
Reimbursing Bank
Shipment
Tenor
Transport Document
UCP 600
Usance Period
Validation
Advising Bank
Applicant
Banking Day
Beneficiary
Bill of Exchange
Bill of Lading
Complying Presentation
Confirmation
Credit
Danish Business Day
Deferred Payment
Discounting
Documents
Draft
Expiry Date
Force Majeure
Governing Law
Issuing Bank
Latest Shipment Date
Letter of Credit
Maturity Date
Negotiating Bank
Negotiation
Original Documents
Place for Presentation
Presentation
Reimbursing Bank
Shipment
Tenor
Transport Document
UCP 600
Usance Period
Validation
Clauses
Parties and Credit Amount
Payment Terms
Document Requirements
Expiry and Presentation
Bank Obligations
Force Majeure
Applicable Law
Shipping Terms
Modification and Amendment
Bank Charges
Compliance Requirements
Document Examination
Payment Undertaking
Discrepancy Handling
Default Provisions
Anti-Money Laundering
Sanctions Compliance
Assignment Restrictions
Notice Requirements
Dispute Resolution
Payment Terms
Document Requirements
Expiry and Presentation
Bank Obligations
Force Majeure
Applicable Law
Shipping Terms
Modification and Amendment
Bank Charges
Compliance Requirements
Document Examination
Payment Undertaking
Discrepancy Handling
Default Provisions
Anti-Money Laundering
Sanctions Compliance
Assignment Restrictions
Notice Requirements
Dispute Resolution
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Retail
Agriculture
Mining
Energy
Textiles
Automotive
Electronics
Chemical Industry
Commodities Trading
Shipping and Logistics
Relevant Teams
Trade Finance
International Banking
Legal
Treasury
Risk Management
Compliance
Operations
Documentary Credits
Foreign Exchange
Commercial Banking
Relevant Roles
Trade Finance Manager
International Trade Specialist
Documentary Credits Officer
Chief Financial Officer
Treasury Manager
Import Manager
Export Manager
Compliance Officer
Legal Counsel
Credit Risk Manager
Banking Operations Manager
Trade Operations Specialist
Finance Director
Supply Chain Manager
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