Document background
The Installment Letter of Credit is a crucial financial instrument used in international trade transactions where payment needs to be structured in multiple installments. This document type is particularly relevant when dealing with large-scale projects, capital equipment purchases, or long-term supply contracts where staged payments align with delivery milestones or project completion phases. Governed by Belgian law and incorporating UCP 600 guidelines, it provides security to both buyers and sellers in international transactions. The document specifies key elements including payment schedules, documentary requirements, and compliance conditions, typically used in scenarios involving substantial transaction values where risk mitigation is essential. It differs from standard Letters of Credit by accommodating multiple payment releases rather than a single payment, making it ideal for complex international commercial transactions requiring structured financial arrangements.
