Document background
The Divisible Letter of Credit is a specialized financial instrument used in international trade transactions where the beneficiary requires the flexibility to utilize the credit in parts. This document is particularly relevant when dealing with multiple shipments, varied delivery schedules, or different components of a larger transaction. Under New Zealand law, this instrument combines local banking regulations with international standards such as the Uniform Customs and Practice for Documentary Credits (UCP 600). The document outlines the mechanisms for dividing the credit, specifies the requirements for each drawing, and establishes the procedures for document presentation and payment. It's commonly used in large-scale trading operations where phased deliveries or multiple suppliers are involved, providing security to all parties while maintaining operational flexibility.
