Document background
The Reverse Letter of Credit is a sophisticated banking instrument used in international trade transactions where traditional financing arrangements need to be modified. This document is particularly relevant in scenarios where sellers wish to provide financing to buyers while maintaining security through bank guarantees. Operating under Hong Kong jurisdiction, it incorporates both local banking regulations and international practices such as UCP 600. The RLOC is commonly used in large-scale international trade, especially when dealing with established sellers who have the capacity to extend credit but require bank-backed security. The document includes detailed specifications of the credit arrangement, required documentation, payment terms, and security mechanisms, all structured within Hong Kong's robust financial and legal framework.
