Advising Bank In Letter Of Credit for United Arab Emirates

Advising Bank In Letter Of Credit Template for United Arab Emirates

This document establishes the legal framework for an advising bank's role in letter of credit transactions under United Arab Emirates law. It outlines the rights, obligations, and limitations of the advising bank's responsibilities in authenticating and communicating letters of credit to beneficiaries. The agreement incorporates UAE banking regulations, international banking practices (UCP 600), and local commercial law requirements, while ensuring compliance with UAE Central Bank directives and anti-money laundering regulations. It details communication protocols, liability limitations, fee structures, and operational procedures specific to the UAE banking sector.

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What is a Advising Bank In Letter Of Credit?

The Advising Bank In Letter Of Credit agreement is essential for financial institutions operating in the UAE that serve as advising banks in international trade transactions. This document becomes necessary when a bank agrees to act as an advising bank to authenticate and forward letters of credit to beneficiaries, typically in cross-border trade financing. It incorporates specific requirements under UAE banking laws, including Federal Law No. 14 of 2018 (UAE Central Bank Law) and Federal Law No. 18 of 1993 (Commercial Transactions Law), while aligning with international banking practices such as UCP 600. The agreement is particularly relevant in the UAE's position as a global trade hub, where letters of credit are frequently used in international commerce. It addresses unique aspects of UAE banking regulations, including compliance with local electronic transaction laws and anti-money laundering requirements.

What sections should be included in a Advising Bank In Letter Of Credit?

1. Parties: Identification of the advising bank and the party requesting advising services

2. Background: Context of the agreement including the relationship between parties and general purpose

3. Definitions: Key terms used throughout the agreement, including banking, L/C, and technical terms

4. Scope of Services: Detailed description of the advising bank's role and responsibilities

5. Authentication and Verification: Procedures for authenticating received L/Cs and verification responsibilities

6. Communication Methods: Approved methods and protocols for communicating L/C details

7. Fees and Charges: Structure and timing of fees for advising services

8. Liability and Limitations: Scope and limitations of advising bank's liability

9. Compliance Requirements: Regulatory compliance obligations and AML requirements

10. Confidentiality: Obligations regarding confidential information handling

11. Force Majeure: Provisions for unforeseen circumstances affecting service delivery

12. Term and Termination: Duration of agreement and termination provisions

13. Governing Law and Jurisdiction: Applicable law and jurisdiction for dispute resolution

What sections are optional to include in a Advising Bank In Letter Of Credit?

1. Electronic Processing: Terms for electronic L/C processing when parties agree to use electronic systems

2. Additional Services: Terms for any additional services beyond standard advising, such as document checking

3. Security Procedures: Specific security protocols when handling sensitive or high-value L/Cs

4. Sanctions Screening: Detailed procedures for sanctions screening when required by specific jurisdictions

5. Branch Network Services: Terms for services provided through the advising bank's branch network

6. Relationship Management: Provisions for ongoing relationship management and escalation procedures

What schedules should be included in a Advising Bank In Letter Of Credit?

1. Schedule 1 - Fee Schedule: Detailed breakdown of all applicable fees and charges

2. Schedule 2 - Service Level Agreement: Specific performance metrics and service standards

3. Schedule 3 - Communication Protocols: Detailed procedures for different types of communications

4. Schedule 4 - Authorized Signatories: List of authorized signatories and specimen signatures

5. Schedule 5 - Compliance Documentation: Required compliance and regulatory documents

6. Appendix A - Standard Forms: Templates for standard communications and requests

7. Appendix B - Technical Requirements: Technical specifications for electronic communications if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking & Financial Services

International Trade

Import/Export

Manufacturing

Commodities Trading

Shipping & Logistics

Retail

Wholesale

Energy & Resources

Agriculture

Construction & Infrastructure

Relevant Teams

Trade Finance

Banking Operations

Compliance

Legal

Risk Management

Treasury

International Banking

Customer Relations

Documentary Credits

Trade Services

Relevant Roles

Trade Finance Manager

Letter of Credit Officer

Compliance Officer

Banking Operations Manager

International Trade Specialist

Documentary Credits Manager

Risk Management Officer

Treasury Manager

Banking Relationship Manager

Trade Services Head

Legal Counsel

Credit Control Manager

Senior Banking Executive

Trade Finance Operations Officer

Financial Controller

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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