Green Clause LC (MT700) — Pre-Shipment Advance for Storage & Insurance
Enable pre-shipment cash (typically 10–30%) to cover storage and insurance while keeping full LC compliance under UCP 600.
ICC / UCP 600 • ISBP 745
SWIFT MT700 / MT707
KYC/AML & Sanctions Screening
Global Desks • 100+ Countries
10–30%
Typical Advance Range
24–72h
Draft Turnaround
$250K+
Min. Deal Size
200+
Institutional Links
🔄 How Does a Green Clause LC Work?
- Buyer Requests LC with Green Clause — clause enables advance for storage/insurance.
- LC Issued via SWIFT MT700 — with explicit pre-shipment advance wording.
- Beneficiary Requests Advance — provides storage contract, insurance, & request letter.
- Advance Released by Bank — typically 10–30% of LC amount.
- Shipment Occurs — beneficiary ships goods and submits full set of documents.
- Final Payment — upon post-shipment document compliance.
Tip: Banks will expect named warehouse/insurer, coverage limits matching LC value, and a clear timeline for shipment.
🧾 Required Documents
Corporate & KYC
- Trade license, cert. of incorporation
- UBO chart, directors’ IDs
- Bank statements (last 6 months)
- Audited financials (3 years)
Trade & LC
- Sales contract / PI with Green Clause
- Draft LC (MT700) & shipment plan
- Incoterms & delivery schedule
Storage & Insurance
- Warehouse agreement (named & insured)
- Insurance policy (goods & period)
- Advance request letter
🛠 Step-by-Step Issuance Process
- Application Submission — send corporate, trade & storage docs.
- Draft LC Preparation — we add Green Clause fields & advance logic.
- Review & Amendments — buyer/seller confirm final text.
- Advance Disbursement — bank releases storage/insurance funds.
- Shipment & Presentation — beneficiary ships & presents docs.
- Final Settlement — remaining payment upon compliance.
| Instrument | Advance? | Storage/Insurance? | Best Use Case |
|---|---|---|---|
| Red Clause LC | ✅ Yes | ❌ No | Raw material procurement |
| Green Clause LC | ✅ Yes | ✅ Yes | Pre-shipment warehousing + insurance |
| Sight LC | ❌ No | ❌ No | Immediate post-shipment payout |
| Usance LC | ❌ No | ❌ No | Deferred buyer payment |
📦 Where Green Clause LCs Shine
Grains & Softs
Elevator storage, fumigation, seasonal flows.
Metals
Coils/billets warehousing with humidity/oxidation cover.
Pharma & Cold Chain
GDP storage, temp-controlled assurance.
Timber & Pulp
Moisture-managed storage prior to vessel laycan.
Chemicals
Hazmat-compliant depots, extended insurance riders.
Livestock/Agri Inputs
Feed, seeds, and inputs staged for planting windows.
🌐 Issuing/Advising Banks & Financial Institutions (30+)
Illustrative panel. Routing depends on corridor, tenor, and compliance. Additional banks available upon request.
| Bank Name | SWIFT | Advantages | Fees* | Timeline* | Min. | Region |
|---|---|---|---|---|---|---|
| HSBC Hong Kong | HSBCHKHHXXX | Top-tier, fast LC ops | 0.5–8% | 1–5d | $1M | Asia |
| BNP Paribas (France) | BNPAFRPP | EU–Asia trade lanes | 0.5–7% | 2–6d | $1M | EU |
| Bank of China (HK) | BKCHHKHHXXX | China corridor strength | 0.5–7% | 2–5d | $1M | Asia |
| Mashreq Bank (UAE) | BOMLAEAD | MENA expertise | 0.5–6% | 2–6d | $500K | MENA |
| Standard Chartered (Dubai) | SCBLAEAD | Cross-border hub | 0.5–7% | 2–6d | $500K | Global |
| UOB (Singapore) | UOVBSGSG | Efficient APAC desk | 0.5–6% | 2–5d | $1M | Asia |
| Crédit Agricole CIB | AGRIFRPP | Structured LC quality | 0.5–7% | 2–6d | $1M | EU |
| PG Asia Investment Bank | AINEMY22 | Pre-shipment friendly | 0.5–7% | 2–6d | $250K | Asia |
| Dushanbe City Bank | LCMDTJ22 | Frontier access | 0.5–7% | 2–6d | $250K | Central Asia |
| Standard Commerce Bank (USA) | STDMDMDMXXX | US credibility | 0.5–8% | 2–6d | $500K | USA |
| Asia Pacific Investment Bank | ASPMMYKL | Recurring trade | 0.5–6% | 2–5d | $300K | Asia |
| Digital Commercial Bank | On Request | Fast digital intake | 0.5–6% | 1–4d | $300K | USA |
| Credit Foncier IM UND Export GmbH | CFEGDE82 | EU compliance | 0.5–7% | 2–7d | $500K | EU |
| Sapelle Intl Bank Liberia Ltd | GNERLRLM | Frontier trade | 0.5–8% | 3–7d | $250K | Africa |
| Unibanque (UK) | UNBQGB22 | SME friendly | 0.5–7% | 2–6d | $500K | UK |
| Al-Amanah Islamic Investment Bank | AIIPPHM1XXX | Sharia-compliant | 0.5–7% | 2–6d | $250K | Philippines |
| Point Bank (UK) | POITGB21 | Agile processes | 0.5–7% | 2–5d | $300K | UK |
| ACE Investment Bank | AIBMMYKL | Rapid setup | 0.5–6% | 2–5d | $250K | Asia |
| Tabarak Investment Capital | TIBIAEADXXX | Structured finance | 0.5–6% | 2–5d | $250K | UAE |
| United Bank for Investment | UNTVIQBAXXX | Regional MENA | 0.5–7% | 3–7d | $250K | Iraq |
| Golden Touch Investment Bank | GTIVMT2LXXX | Custom clauses | 0.5–7% | 2–6d | $250K | Offshore |
| J.P. Morgan (NY) | CHASUS33 | Global reimbursement | On Req. | 1–3d | $1M | Global |
| Commerzbank (Frankfurt) | COBADEFF | EU reimbursement | On Req. | 2–4d | $500K | EU |
| DBS Bank (Hong Kong) | DHBKHKHHXXX | Strong ops | On Req. | 2–6d | $500K | Asia |
| Maybank (Singapore) | On Request | ASEAN reach | On Req. | 2–6d | $500K | Asia |
| OCBC (Singapore) | On Request | Commodity corridors | On Req. | 2–6d | $500K | Asia |
| First Abu Dhabi Bank | On Request | Project LCs | On Req. | 2–6d | $1M | MENA |
| Emirates NBD | On Request | GCC trade | On Req. | 2–6d | $500K | MENA |
| Standard Bank (South Africa) | On Request | Africa supply chains | On Req. | 3–7d | $250K | Africa |
| MCB (Mauritius) | MCBLMUMU | Africa/India Ocean | On Req. | 2–6d | $250K | Africa |
| ABC Banking (Mauritius) | ABCKMUMU | SME-friendly | On Req. | 2–5d | $250K | Africa |
| Maubank (Mauritius) | MPCBMUMU | Flexible structures | On Req. | 2–5d | $250K | Africa |
| Exim Bank (Tanzania) | EXTNTZTZ | EA corridors | On Req. | 3–7d | $250K | Africa |
| Israel Discount Bank | IDBYUS33 | US/EU connectivity | On Req. | 2–6d | $1M | US/IL |
| Citibank | CITIUS33 | Global network | On Req. | 2–5d | $1M | Global |
| Barclays (UK) | BARCGB22 | UK trade | On Req. | 2–5d | $500K | UK |
| NatWest (UK) | NWBKGB2L | Domestic/intl mix | On Req. | 2–6d | $500K | UK |
*Fees & timelines vary by risk, corridor, tenor, and confirmation. All subject to bank compliance & final approval.
💬 Client Reviews (10)
MENA Foods★★★★★
Advance covered silo storage perfectly; shipment hit laycan on time.
Baltic Steel★★★★★
Humidity-controlled warehousing funded under the LC. Clean presentation.
EuroTextiles★★★★★
Insurance riders matched LC language; zero bank queries.
GCC EPC★★★★★
Mobilization advance released via Green Clause — project started early.
SA Mining★★★★★
Warehouse receipts + insurer letters aligned perfectly with LC fields.
West Africa Agro★★★★★
Structured advance bridged harvest gap. Strong Africa corridor panel.
Osaka Tools★★★★☆
Minor amendment, then smooth. Funds on schedule.
Andes Infra★★★★★
Pre-shipment costs financed; final draw on first presentation.
Iberia Energy★★★★★
LC + hedging combo reduced Basis risk materially.
Pacific Commodities★★★★★
Insurance proof handled up front — compliance friction near zero.
❓ Frequently Asked Questions (15)
1) What advance percentage is typical?
Most banks allow 10–30% depending on goods, risk, and storage/insurance quality.
2) Can the advance be revolving?
Yes, if the LC is revolving and warehouse/insurance coverage is continuous and evidenced.
3) Which documents trigger the advance?
Warehouse contract, insurance policy/cover note, and a beneficiary advance request referencing the LC.
4) Are Green Clause LCs transferable?
They can be, if the LC text permits transfer and the transferee meets storage/insurance conditions.
5) How fast can we obtain the advance?
Once the LC is operative and storage/insurance proofs are accepted, advances can release in 1–3 business days.
6) Do we need confirmation?
Optional. For higher-risk corridors, adding confirmation typically improves certainty and pricing clarity.
7) Can we combine with discounting?
Yes — pre-shipment advance via Green Clause; post-shipment discounting upon compliant presentation.
8) What if goods are delayed?
Inform banks early. Extensions/amendments (MT707) may be needed for expiry/latest shipment.
9) What insurance language is required?
Coverage to LC value (or agreed %), relevant risks, clauses naming beneficiary/issuing bank per LC text.
10) Does this work with bonded warehouses?
Yes — provided documentation is acceptable to the issuing/advising bank and insurer.
11) Are startups eligible?
Possible with stronger collateral, reputable warehouse/insurer, and suitable confirming bank.
12) Is ESG/Impact compatible?
Yes. Some banks offer preferential treatment for certified sustainable supply chains.
13) What are common discrepancies?
Mismatched warehouse names, insurance limits/period, or missing cross-references to the LC number.
14) Can advances exceed 30%?
Rarely — requires exceptional mitigants (insurance, collateral, or confirmed LC clauses).
15) Which rules apply?
Documentary credits under UCP 600; drafts/amendments via SWIFT (e.g., MT700/707).
🛡️ Compliance & Risk Controls
Bank Requirements
- KYC/AML & sanctions screening
- Warehouse validation & insurer rating
- Advance conditions embedded in LC text
Risk Mitigation
- Insured storage & custody receipts
- Clear timelines for shipment
- Optional confirmation/insurance add-ons
Sample Clause Snippet
“Green Clause: Against Beneficiary’s request, warehouse contract, and insurance evidence acceptable to Issuing Bank, an advance of up to __% of the LC amount may be paid prior to shipment. Such advance shall be deducted from payment(s) under compliant presentation.”
📮 Request a Green Clause LC
This page is informational and non-binding. Final terms depend on bank approvals and compliance outcomes.