What is RED Clause in LC?

All L/C’s opened on SAIL for buying steel on FOB basis need to incorporate the Red Clause. This clause allows SAIL to negotiate its commercial invoice and realize full payment after the expiry of the Laycan period given in the NOR, subject to receipt of cargo at the port. Red clause is operated whenever the buyer, within the specified laydays fails to nominate a suitable vessel or vessel nominated by the buyer fails to arrive at the designated load port within the laycan. For further details please refer to General Terms and conditions.

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