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A Payment Direction Letter is commonly used in Hong Kong financial and commercial transactions where formal payment instructions need to be documented and communicated to financial institutions. This document is essential in scenarios involving structured finance, project finance, or complex commercial arrangements where clear payment mechanics must be established. The letter typically includes detailed account information, payment amounts, timing, and any conditions that must be met before payment can be made. Under Hong Kong law, these letters serve as binding instructions to financial institutions and are often used in conjunction with facility agreements, security arrangements, or other commercial contracts. The document ensures compliance with Hong Kong banking regulations and provides a clear audit trail for payment arrangements.
