Restricted Letter of Credit (MT700) – Controlled LC with Predefined Advising or Negotiating Bank
Secure & Selective | SWIFT MT700 Format for Trade Control
⚠️ Want to Limit LC Use to a Specific Bank or Partner?
A European machinery exporter had issues with buyers choosing low-tier banks. With NNRV’s Restricted LC structure, they mandated all presentations go through their preferred advising bank—ensuring reliability and faster payments.
🧠 “We only trust certain banks. With NNRV, our Restricted LC let us stay in control.” – Jeanne L., Heavy Equipment Supplier
What is a Restricted Letter of Credit (LC)?
A Restricted LC is a type of Letter of Credit that limits negotiation or advising rights to a specific bank named in the LC. Only this bank is authorized to handle the documents and process the payment.
It is ideal for exporters who want to work only with trusted institutions, reduce compliance issues, or centralize LC management. At NNRV, we structure Restricted LCs under MT700 format in compliance with UCP 600, ensuring secure, controlled transactions.
🧠 “We use Restricted LCs for all key buyers. It avoids confusion and delays with unknown banks.” – Omar S., Energy Components Exporter
Key Benefits of Restricted LC
✅ Full Control – Only your trusted advising or negotiating bank is allowed to handle the LC.
✅ Simplified Compliance – Avoid errors from unauthorized banks.
✅ Reduced Risk – Prevents use of low-tier or non-cooperative institutions.
✅ Faster Processing – Your preferred bank already knows your compliance standards.
✅ UCP 600 Compliant – All terms are enforceable and standardized.
How Does a Restricted Letter of Credit Work?
Buyer Requests LC Issuance – Including your designated bank as the only allowed negotiating/advising bank.
Issuing Bank Sends LC via SWIFT MT700 – Marked as “Restricted to [Bank Name]”.
Seller Ships Goods – Presents documents to the authorized bank only.
Advising Bank Verifies Compliance – Ensures all documents meet the terms.
Payment Is Released – From issuing bank via the restricted advising bank.
📂 Documents Required for Restricted LC Issuance
To issue a Restricted LC, we verify your trade structure and ensure your preferred bank is compatible. Required documents include:
📌 Sales Contract – With clause naming the advising/negotiating bank.
📌 Commercial or Proforma Invoice – Matching LC terms.
📌 Company Registration & KYC – For both buyer and seller.
📌 Bank Letter – Confirmation from advising bank of willingness to act.
📌 Shipping Details – Dates, routes, Incoterms.
🏦 Trusted Banks for Restricted LC Structures (MT700)
We work with institutions that regularly act as designated banks in restricted LC transactions. Here are some of the most requested:
| Bank Name | SWIFT Code | Advantages | Disadvantages | Issuance Fees | Issuance Time | Min. Transaction | LC Types |
|---|---|---|---|---|---|---|---|
| HSBC Hong Kong | HSBCHKHHXXX | Ideal for restricted LC handling | May charge higher advising fees | 0.5–1.5% | 2–5 days | $1M | Restricted, Confirmed |
| BNP Paribas HK | BNPAHKHHXXX | Smooth LC flow with EU partners | Advising bank approval required | 0.5–1.2% | 2–6 days | $1M | Restricted, Transferable |
| Credit Foncier GmbH | CFEGDE82 | Preferred in long-term EU contracts | Only available for select clients | 0.7–1.3% | 2–7 days | $500K | Restricted, Irrevocable |
| Standard Commerce USA | STDMDMDMXXX | US-based control, good for restricted LC | Conservative document handling | 0.8–1.5% | 2–6 days | $500K | Restricted, Confirmed |
| ABC Bank Mauritius | ABCKMUMU | Friendly to SME exporters | Less known globally | 0.5–1% | 2–5 days | $250K | Restricted, Usance |
(📩 Other banks can be arranged depending on your relationship and region.)
🎯 Why Use a Restricted LC?
| 🔒 Feature | ✅ Benefit |
| Single Bank Control | Only your bank handles the LC |
| Fewer Errors | Known bank, known procedures |
| Streamlined Processing | Your bank is pre-approved |
| Trusted Advisory Network | Avoid exposure to weak institutions |
| Contractual Security | Issued under UCP 600 |
🛠️ Our 5-Step Process
Client selects preferred advising/negotiating bank
We structure LC accordingly in MT700 format
Buyer submits request with restricted terms
Issuing bank confirms and sends to designated bank
Documents processed only through approved channel
🔍 Restricted LC vs Other Instruments
| Instrument | Trigger | Best Use Case | Seller Protection |
| Restricted LC | Bank-specific clause | Controlled trade flows | 🔒🔒🔒🔒 |
| Irrevocable LC | Document compliance | General global trade | 🔒🔒🔒🔒🔒 |
| Confirmed LC | Dual bank commitment | High-risk jurisdictions | 🔒🔒🔒🔒 |
| Transferable LC | Transfer approval | Multi-tier trade structures | 🔒🔒🔒 |
Why Choose NNRV Trade Partners for Restricted LC Structuring?
🔒 Strategic Bank Matching Support
📄 Full Drafting with Clear Restrictions
✅ Expertise in Complex Trade Structures
🌍 Global Relationships with Top Advising Banks
📁 End-to-End Documentation and Issuance Control
💲 Important Notes on Fees
Fees depend on:
• Complexity of the restriction clause
• Relationship with the chosen bank
• Volume and frequency of transactions
🔹 Contact us for optimized fee structures tailored to your preferred banking partners.
🧠 Real Testimonials
“We now centralize all LC flows through one bank—thanks to NNRV’s restricted LC setup.”
– Nassim B., Industrial Machinery – Tunisia
“Our trade partners accept it because it’s secure and professional. Saves us audit time too.”
– Clara T., Solar Panel Exporter – Germany
📚 What Makes Us Different?
✔️ Experience in Restricted & Controlled LC Design
✔️ International Bank Coordination
✔️ Legal and Compliance Drafting Review
✔️ Fast Setup and Client-Centric Advisory
📌 From $250K to $100M+ in centralized LC solutions
❓ Top 5 FAQ – Answered by Experts
Can the LC be used by any bank? No. Only the bank listed in the LC can process it.
Is it compliant with UCP 600? Yes. Restricted LCs are fully valid under UCP 600 if terms are clear.
Can I add confirmation too? Yes. The same restricted bank can also act as confirming bank.
Is it slower than regular LCs? No. In fact, it can be faster since procedures are predefined.
Can the restriction be removed later? Only through a formal LC amendment agreed by all parties.
🔗 Related Services
• Confirmed LC
• Transferable LC
• LC Centralization Strategy
• Export Workflow Structuring
• Bank Relationship Advisory
📖 Strategic Blog Posts
• Why Use Restricted LCs to Streamline Export Operations
• Restricted vs Transferable LC: Key Differences
• Building a Global LC Policy for Large Exporters
🚀 Structure Your Restricted LC Today!
Take control of your trade finance channels. Let NNRV issue your Restricted LC with precision and partner alignment.
📩 Book a Bank Structuring Session
☎️ Work With Our LC Desk | 🌍 Issuance in 40+ Countries | ✅ 100% SWIFT MT700 Ready