Outstanding Letter Of Credit for United Arab Emirates

Outstanding Letter Of Credit Template for United Arab Emirates

A specialized banking instrument governed by UAE federal laws and international banking practices (UCP 600), used to facilitate secure international trade transactions. This document represents a bank's irrevocable commitment to pay a specified sum to a beneficiary upon presentation of compliant documents. Operating within the UAE's legal framework, it incorporates both civil law and Sharia principles, providing security for cross-border transactions while ensuring compliance with local banking regulations and international standards. The document includes specific terms for payment, document requirements, and validity periods, structured to protect all parties' interests in international trade dealings.

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What is a Outstanding Letter Of Credit?

An Outstanding Letter of Credit is a fundamental banking instrument used extensively in international trade transactions within the UAE's commercial framework. This document type serves as a bank's irrevocable promise to pay, providing security to sellers in international transactions while protecting buyers' interests. It operates under UAE Federal Law No. 18 of 1993 (Commercial Code) and UAE Federal Law No. 14 of 2018 (Central Bank Law), incorporating both local regulations and international banking practices (UCP 600). The document is particularly relevant in the UAE's business environment, where it facilitates secure cross-border transactions while ensuring compliance with Islamic banking principles. It includes detailed specifications for payment terms, document requirements, validity periods, and conditions for drawing under the credit, making it an essential tool for international trade finance in the region.

What sections should be included in a Outstanding Letter Of Credit?

1. Letter Reference and Date: Unique reference number and issuance date of the Letter of Credit

2. Applicant Details: Full name, address, and contact information of the party requesting the Letter of Credit

3. Beneficiary Details: Full name, address, and contact information of the party in whose favor the Letter of Credit is issued

4. Issuing Bank Details: Name and details of the bank issuing the Letter of Credit

5. Credit Amount and Currency: Specific amount and currency of the Letter of Credit, including any tolerance levels

6. Expiry Date and Place: Clear statement of when and where the Letter of Credit expires

7. Form of Credit: Specification that this is an irrevocable standby Letter of Credit

8. Available With/By: Details of how and where the credit is available (payment, acceptance, negotiation)

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

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

11. Presentation Period: Timeframe within which documents must be presented after shipment

12. Instructions for Bank: Specific instructions for handling documents and payments

What sections are optional to include in a Outstanding Letter Of Credit?

1. Transferability Clause: Include when the Letter of Credit needs to be transferable to another beneficiary

2. Revolving Terms: Include for revolving Letters of Credit that automatically renew

3. Red Clause: Include when advance payment to the beneficiary is allowed

4. Back-to-Back Provisions: Include when the Letter of Credit supports a back-to-back arrangement

5. Islamic Banking Compliance: Include specific terms ensuring Sharia compliance when required

6. Special Payment Terms: Include for deferred payment or acceptance terms

7. Force Majeure Clause: Include specific provisions for unforeseen circumstances affecting performance

8. Assignment of Proceeds: Include when proceeds can be assigned to a third party

What schedules should be included in a Outstanding Letter Of Credit?

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 - Description of Goods/Services: Detailed description of the goods or services covered by the Letter of Credit

4. Schedule D - Payment Schedule: Timeline and conditions for payments if involving multiple drawings

5. Appendix 1 - Required Document Formats: Templates or samples of required documents

6. Appendix 2 - Bank Authorization Forms: Standard forms required by the issuing bank

7. Appendix 3 - UCP 600 Incorporation: Specific UCP 600 articles applicable to this Letter of Credit

8. Appendix 4 - Sanctions Compliance Declaration: Required declarations regarding compliance with international sanctions

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
Clauses
Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Retail

Commodities Trading

Construction

Energy

Shipping and Logistics

Agricultural Trade

Industrial Equipment

Textiles and Garments

Oil and Gas

Relevant Teams

Legal

Finance

Treasury

International Trade Operations

Risk Management

Compliance

Procurement

Supply Chain

Trade Finance

Documentary Credits

Corporate Banking

Relevant Roles

Trade Finance Manager

International Business Development Manager

Chief Financial Officer

Import/Export Manager

Treasury Manager

Documentary Credits Specialist

Trade Operations Manager

Financial Controller

Banking Relationship Manager

Compliance Officer

Risk Management Officer

Supply Chain Manager

Procurement Manager

Legal Counsel

Credit Risk Analyst

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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