A letter of credit provision allowing the beneficiary to draw partial advance payments under the credit. This provision used to be set out in red ink,
therefore the ‘red clause’ designation. Generally, the beneficiary is only required, in order to receive payment of the authorised advances, to present drafts along with a statement that shipping documents will be provided in due time.
Similar to Advance Clause Credits; used mainly in Australia and New Zealand in relation to the export of wool and meat from those countries.