Document background
The Issuing Bank Letter of Credit is a fundamental trade finance instrument used to facilitate secure international trade transactions. This document type is particularly relevant when parties seek to mitigate the risks associated with cross-border trade by involving a trusted financial institution as an independent payment guarantor. Under Danish law and in compliance with UCP 600 rules, the letter of credit provides a structured framework detailing the conditions for payment, required documentation, and timeline for completion of the trade transaction. It is commonly used when there is limited trust between trading parties, when dealing with new business relationships, or when required by regulatory or commercial considerations. The document includes specific details about the transaction, parties involved, payment terms, and document requirements, while incorporating necessary provisions to comply with Danish financial regulations and EU banking standards.
