Document background
The Letter of Credit Contract serves as a fundamental instrument in international trade finance under Indonesian jurisdiction. It is primarily used when Indonesian companies engage in cross-border trade transactions requiring secure payment mechanisms. The document incorporates essential elements from Bank Indonesia regulations, the Indonesian Civil Code (KUHPerdata), and international banking practices (UCP 600). This contract type is particularly crucial in Indonesia's growing international trade sector, where it provides security for both importers and exporters by ensuring that payment will be made only upon strict compliance with specified documentary requirements. The contract typically includes detailed provisions for document presentation, payment terms, bank obligations, and dispute resolution mechanisms, all while ensuring compliance with Indonesian foreign exchange regulations and international banking standards.
