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Restricted Letter Of Credit for Singapore

Restricted Letter Of Credit Template for Singapore

A Restricted Letter of Credit is a specialized financial instrument governed by Singapore law and international banking practices (UCP 600), which provides a secure method of payment in international trade. It differs from standard letters of credit by including specific restrictions on its use, transfer, or negotiation. Under Singapore's legal framework, it offers enhanced security for the issuing bank while ensuring that payment is made only when predetermined conditions are strictly met. The document incorporates specific Singapore banking regulations and MAS guidelines while adhering to international banking standards.

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What is a Restricted Letter Of Credit?

The Restricted Letter of Credit serves as a crucial trade finance instrument in international commerce, particularly within Singapore's robust financial framework. This document is specifically utilized when parties require enhanced control over the payment process and additional security measures beyond standard letters of credit. It includes detailed specifications of required documents, payment terms, and specific restrictions on negotiation or transfer. The document is structured to comply with both Singapore banking regulations and international UCP 600 rules, making it particularly suitable for complex international trade transactions where strict control over credit utilization is required.

What sections should be included in a Restricted Letter Of Credit?

1. Letter Reference Number: Unique identifier for the letter of credit

2. Date of Issuance: When the letter of credit becomes effective

3. Applicant Details: Complete information about the party requesting the letter of credit

4. Beneficiary Details: Complete information about the party in whose favor the credit is issued

5. Credit Amount: Specified amount and currency of the letter of credit

6. Expiry Date: When the letter of credit expires

7. Required Documents: Specific documents needed for credit utilization

8. Terms and Conditions: Specific restrictions and conditions for credit utilization

What sections are optional to include in a Restricted Letter Of Credit?

1. Transferability Clause: Optional clause used when the credit needs to be transferable to another beneficiary

2. Red Clause: Optional provisions for advance payment arrangements

3. Green Clause: Optional provisions for warehouse storage arrangements

What schedules should be included in a Restricted Letter Of Credit?

1. Document Requirements Schedule: Detailed list of required documents and their specifications

2. Goods Description Schedule: Detailed description of goods covered by the letter of credit

3. Special Conditions Schedule: Additional terms and conditions specific to the transaction

4. Bank Charges Schedule: Breakdown of applicable banking fees and charges

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

Jurisdiction

Singapore

Publisher

Genie AI

Document Type

Letter of Credit

Cost

Free to use

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