The Recourse Letter of Credit is a fundamental instrument in international trade finance, providing payment security while managing risk for financial institutions. This document is typically used when a bank wants to maintain explicit recourse rights against the applicant (buyer) while providing payment assurance to the beneficiary (seller). Under Belgian law, which incorporates both civil law traditions and EU regulations, the document must comply with specific legal requirements while adhering to international banking standards such as UCP 600. The instrument is particularly valuable in cross-border transactions where parties seek a balanced approach to trade finance, combining the security of a bank's payment undertaking with the bank's right to reimbursement from the applicant. The document includes detailed terms regarding document presentation, payment conditions, and recourse mechanisms, making it suitable for complex international trade transactions where additional security layers are required.
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1. Bank Letterhead and Reference: Full details of the issuing bank, including address and reference number
2. Date: Date of issuance of the letter of credit
3. Beneficiary Details: Full name and address of the beneficiary of the letter of credit
4. Applicant Details: Full name and address of the applicant requesting the letter of credit
5. Credit Amount and Currency: Specific amount and currency of the letter of credit
6. Form of Credit: Specification that this is a recourse letter of credit and its form (irrevocable)
7. Expiry Details: Expiry date and place for presentation of documents
8. Available With/By: Details of how and where the credit is available (payment, acceptance, negotiation)
9. Required Documents: List of documents required for presentation
10. Shipment Terms: Details of shipment, latest shipment date, and partial shipments/transhipment permissions
11. Recourse Terms: Specific terms regarding the bank's right of recourse against the applicant
12. Governing Law and Jurisdiction: Statement that Belgian law governs and jurisdiction details
13. UCP Reference: Reference to UCP 600 governance
14. Authentication: Bank's authorized signatures and authentication
1. Special Payment Conditions: Used when there are specific conditions for payment beyond standard presentation
2. Revolving Terms: Include when the letter of credit is revolving rather than single-use
3. Red Clause Provisions: Include when advance payment facilities are provided to the beneficiary
4. Transfer Rights: Include when the credit is transferable to other beneficiaries
5. Back-to-Back Provisions: Include when the credit supports a back-to-back arrangement
6. Confirmation Instructions: Include when confirmation by another bank is requested/required
7. Insurance Requirements: Include when specific insurance requirements beyond standard coverage are needed
1. Schedule A - Document Requirements: Detailed list and format of all required documents for presentation
2. Schedule B - Payment Terms: Detailed payment calculations, schedules, and any special pricing arrangements
3. Schedule C - Goods Description: Detailed description of the goods or services covered by the letter of credit
4. Appendix 1 - Form of Demand: Standard format for presentation of demand under the letter of credit
5. Appendix 2 - Form of Transport Documents: Templates or requirements for transport documents
6. Appendix 3 - Form of Transfer Request: Standard format for transfer requests if credit is transferable
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Import/Export
Shipping and Logistics
Commodities Trading
Retail
Wholesale
Agriculture
Energy
Construction
Industrial Equipment
Relevant Teams
Trade Finance
International Banking
Credit Risk
Legal
Compliance
Treasury
Operations
Documentary Credits
Corporate Banking
Risk Management
Trade Operations
Financial Control
Relevant Roles
Trade Finance Manager
International Banking Officer
Credit Risk Officer
Documentary Credits Specialist
Treasury Manager
Import/Export Manager
Chief Financial Officer
Financial Controller
Trade Operations Manager
Relationship Manager
Legal Counsel
Compliance Officer
Senior Credit Analyst
Banking Operations Manager
International Trade Specialist
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