Revolving Lc for United Arab Emirates

Revolving Lc Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes a revolving letter of credit facility between a bank and an applicant for conducting international trade transactions. The agreement details the terms and conditions for the automatic reinstatement of the credit amount after each utilization, specifying documentation requirements, compliance procedures, and operational mechanisms in accordance with UAE banking regulations and international trade practices. It incorporates provisions from UAE Federal Commercial Law, Central Bank regulations, and typically references UCP 600 guidelines, providing a secure payment mechanism for recurring trade transactions.

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What is a Revolving Lc?

This document is essential for businesses engaged in regular, recurring international trade transactions under UAE jurisdiction. A Revolving Letter of Credit agreement provides a renewable credit facility that automatically reinstates after each utilization, eliminating the need for multiple LC applications. It is particularly useful for ongoing trade relationships with regular shipment schedules or periodic purchasing patterns. The document incorporates UAE banking regulations, international banking practices (UCP 600), and local commercial law requirements, making it suitable for both domestic UAE banks and international trade transactions. It includes comprehensive details about credit limits, reinstatement mechanisms, documentation requirements, compliance procedures, and risk management protocols, serving as a crucial tool for trade finance operations in the UAE market.

What sections should be included in a Revolving Lc?

1. Parties: Identification of the issuing bank, applicant, and beneficiary

2. Background: Context of the trade relationship and purpose of the revolving LC

3. Definitions: Key terms including revolving mechanism, credit amount, reinstatement terms

4. Facility Details: Specifics of the revolving LC including amount, currency, and revolving terms

5. Reinstatement Mechanism: Terms and conditions for automatic reinstatement of the credit amount

6. Utilization Procedure: Process for drawing under the LC and documentation requirements

7. Fees and Charges: All applicable fees, commissions, and charges

8. Documentation Requirements: Required documents for presentation and acceptance criteria

9. Expiry and Validity: Term of the facility and conditions for expiry

10. Bank's Rights and Obligations: Scope of bank's commitments and discretionary rights

11. Applicant's Undertakings: Obligations and representations of the applicant

12. Default Events: Circumstances constituting default and consequences

13. Governing Law and Jurisdiction: Application of UAE law and jurisdiction provisions

What sections are optional to include in a Revolving Lc?

1. Sanctions Compliance: Required when parties are involved in international trade with sanctioned countries or sensitive goods

2. Islamic Banking Compliance: Required when the LC needs to comply with Sharia principles

3. Multi-Currency Provisions: Include when the LC can be utilized in multiple currencies

4. Counter-Guarantees: Required when involving correspondent banks or additional security

5. Electronic Presentation: Include when allowing electronic presentation of documents

6. Green Clause Provisions: Include when advance payment facilities are required

What schedules should be included in a Revolving Lc?

1. Schedule 1 - Fee Schedule: Detailed breakdown of all fees, charges, and commission rates

2. Schedule 2 - Form of Utilization Request: Standard format for requesting drawings under the LC

3. Schedule 3 - Required Documents: Comprehensive list of required documents and their specifications

4. Schedule 4 - Specimen Signatures: Authorized signatures for the applicant and verification procedures

5. Schedule 5 - Standard Forms: Templates for amendments, notifications, and other standard communications

6. Appendix A - Compliance Checklist: Checklist for document verification and compliance requirements

7. Appendix B - Operating Procedures: Detailed procedures for LC operations and documentation handling

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 & Financial Services

International Trade

Manufacturing

Retail

Commodities Trading

Oil & Gas

Construction

Automotive

Agriculture

Textiles & Garments

Electronics & Technology

Shipping & Logistics

Relevant Teams

Trade Finance

Treasury

International Banking

Credit Risk

Legal

Compliance

Operations

Documentary Credits

Supply Chain

Finance

International Trade

Customer Relations

Relevant Roles

Trade Finance Manager

Chief Financial Officer

Treasury Manager

Import/Export Manager

Trade Operations Officer

Credit Risk Manager

Documentary Credits Specialist

Compliance Officer

International Trade Specialist

Banking Relationship Manager

Finance Director

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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