Irrevocable Lc for United Arab Emirates

Irrevocable Lc Template for United Arab Emirates

An Irrevocable Letter of Credit under UAE law is a binding financial instrument that serves as a guarantee of payment in international trade transactions. This document, governed by UAE Federal Laws and international UCP 600 rules, provides a secure method of payment where the issuing bank commits to pay the beneficiary upon presentation of compliant documents. The instrument is particularly significant in the UAE context, given Dubai and Abu Dhabi's positions as major international trading hubs, and incorporates both international banking standards and local UAE banking regulations, including relevant Central Bank directives.

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What is a Irrevocable Lc?

The Irrevocable LC is a fundamental document in international trade finance, particularly crucial in the UAE's business environment where it facilitates secure cross-border transactions. It represents a bank's irrevocable commitment to pay the beneficiary upon presentation of compliant documents, providing security to both buyers and sellers in international trade. The document is governed by UAE Federal Laws, particularly Federal Law No. 18 of 1993 (Commercial Transactions Law) and UAE Central Bank regulations, while also adhering to international UCP 600 standards. This instrument is especially relevant in the UAE's trading ecosystem, where it supports various industries from oil and gas to general trading, helping manage risk in international commercial transactions. The Irrevocable LC's structure ensures that sellers receive payment upon meeting specified conditions while buyers are assured of receiving their goods as described in the documentation.

What sections should be included in a Irrevocable Lc?

1. Letter Reference Number: Unique identification number of the LC

2. Date of Issuance: Date when the LC is issued

3. Issuing Bank Details: Complete name and address of the issuing bank

4. Applicant Details: Full name and address of the party requesting the LC (buyer/importer)

5. Beneficiary Details: Full name and address of the party in whose favor the LC is issued (seller/exporter)

6. Currency and Amount: Specified currency and maximum amount available under the LC

7. Expiry Date and Place: Date and location where the LC expires

8. Form of Presentation: Specification of how and where documents should be presented

9. Documents Required: Detailed list of documents required for presentation

10. Shipment Terms: Details of shipment including latest shipment date and partial shipments

11. Payment Terms: Specification of when and how payment will be made

12. Confirmation Instructions: Whether the LC requires confirmation from another bank

13. Governing Law Statement: Specification of UAE law and UCP 600 governance

What sections are optional to include in a Irrevocable Lc?

1. Transferability Clause: Required if the LC needs to be transferable to another beneficiary

2. Red Clause: Include when advance payment to the beneficiary is permitted

3. Green Clause: Include when storage of goods at destination is part of the arrangement

4. Revolving Credit Clause: Include when the LC is meant to be automatically renewed

5. Back-to-Back Provisions: Required when the LC supports a back-to-back arrangement

6. Insurance Instructions: Required when specific insurance arrangements need to be specified

7. Special Conditions: Any additional terms specific to the transaction

What schedules should be included in a Irrevocable Lc?

1. Schedule A - Commercial Invoice Requirements: Detailed specifications for the format and content of commercial invoices

2. Schedule B - Transport Document Requirements: Specific requirements for bills of lading or other transport documents

3. Schedule C - Goods Description: Detailed description of the goods being traded including specifications and quantities

4. Schedule D - Price Calculation: Breakdown of pricing including any adjustments or variations permitted

5. Appendix 1 - Required Document Formats: Sample formats for required documents

6. Appendix 2 - Bank Contact Details: Complete contact information for all banks involved in the transaction

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
Clauses
Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Retail

Commodities Trading

Oil and Gas

Construction

Agriculture

Textiles

Electronics

Automotive

Shipping and Logistics

Insurance

Relevant Teams

Trade Finance

International Banking

Credit Risk

Legal and Compliance

Treasury

Financial Control

Operations

Documentary Credits

Global Transaction Services

Commercial Banking

Supply Chain

International Trade Operations

Relevant Roles

Trade Finance Manager

International Business Development Manager

Import/Export Coordinator

Letter of Credit Specialist

Trade Operations Officer

Commercial Banking Manager

Credit Risk Officer

Documentary Credits Manager

Treasury Manager

Chief Financial Officer

Finance Director

Banking Relationship Manager

Compliance Officer

Trade Finance Analyst

Supply Chain Manager

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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