A Trade Finance Letter of Credit is a fundamental instrument in international trade finance, providing payment security and risk mitigation for cross-border transactions. Under New Zealand jurisdiction, it combines local banking regulations with international standards, particularly the UCP 600 rules. This document is typically used when there's a need for a secure payment mechanism between parties who may not have established trading relationships or when required by regulatory or commercial circumstances. It contains critical information including payment terms, document requirements, shipping conditions, and compliance criteria. The document is particularly relevant in situations where the buyer and seller are in different countries and need a trusted banking intermediary to facilitate the transaction and provide payment assurance.

1. Letter of Credit Number and Date: Unique reference number and issuance date of the LC

2. Form of Documentary Credit: Specification that this is an irrevocable documentary credit and applicable rules (e.g., UCP 600)

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

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

5. Currency and Amount: Specified currency and maximum amount available under the LC

6. Expiry Date and Place: Date and location where the LC expires

7. Available With/By: Specification of how the credit is available (by sight, deferred payment, acceptance, or negotiation)

8. Required Documents: Detailed list of all documents required for presentation

9. Shipment Terms: Details of shipment including latest shipment date, partial shipments, and transhipment conditions

10. Description of Goods/Services: Precise description of the goods or services being traded

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

12. Banking Charges: Specification of which party bears which banking charges