Document background
A Trade Finance Letter of Credit is a fundamental instrument in international trade finance, providing payment security and risk mitigation for cross-border transactions. Under New Zealand jurisdiction, it combines local banking regulations with international standards, particularly the UCP 600 rules. This document is typically used when there's a need for a secure payment mechanism between parties who may not have established trading relationships or when required by regulatory or commercial circumstances. It contains critical information including payment terms, document requirements, shipping conditions, and compliance criteria. The document is particularly relevant in situations where the buyer and seller are in different countries and need a trusted banking intermediary to facilitate the transaction and provide payment assurance.
