Transferable Lc for United Arab Emirates

Transferable Lc Template for United Arab Emirates

A Transferable Letter of Credit document governed by UAE law is a specialized banking instrument that enables the first beneficiary to transfer all or part of the credit to a second beneficiary. This document, operating under the UAE Federal Commercial Code and banking regulations, incorporates international banking practices (UCP 600) while maintaining compliance with UAE legal requirements. It details the terms of transfer, rights and obligations of all parties, documentation requirements, and payment conditions, serving as a crucial tool in international trade finance within the UAE's legal framework.

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What is a Transferable Lc?

The Transferable LC is a crucial document in international trade finance, particularly relevant in the UAE's position as a global trading hub. This document type is specifically used when an intermediary trader (first beneficiary) needs to transfer the credit rights to their supplier (second beneficiary). Operating under UAE Federal Law No. 18 of 1993 (Commercial Code) and relevant banking regulations, the Transferable LC must comply with both local UAE requirements and international banking standards such as UCP 600. The document is essential in transactions where the original beneficiary acts as a middleman and needs to transfer the credit to fulfill their trading obligations while maintaining their commercial position in the transaction chain.

What sections should be included in a Transferable Lc?

1. Letter Reference and Date: Unique LC reference number and issuance date

2. Parties: Details of the issuing bank, first beneficiary, and transferring bank

3. Original Credit Details: Reference to the original LC including number, date, and amount

4. Transfer Terms: Specific conditions under which the credit is being transferred

5. Credit Amount: Amount of the credit being transferred and any partial transfer details

6. Expiry Date and Place: Validity period and location for presentation of documents

7. Documentation Requirements: List of required documents and presentation conditions

8. Payment Terms: Terms and conditions for payment, including timing and method

9. Bank Charges: Allocation of banking fees and charges

10. Governing Law and Jurisdiction: Specification of UAE law and relevant jurisdiction

What sections are optional to include in a Transferable Lc?

1. Second Beneficiary Details: Used when the second beneficiary is known at the time of transfer

2. Special Instructions: Include when there are specific handling requirements or conditions

3. Partial Shipments/Drawings: Include when partial shipments or drawings are permitted

4. Transfer Restrictions: Used when there are specific limitations on further transfers

5. Document Substitution Rights: Include when first beneficiary has right to substitute documents

6. Insurance Requirements: Used when specific insurance conditions apply to the transfer

What schedules should be included in a Transferable Lc?

1. Schedule A - Original LC Terms: Complete copy or summary of the original letter of credit terms

2. Schedule B - Transfer Instructions: Detailed instructions for the transfer process

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

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

5. Appendix 2 - Document Substitution Procedures: Procedures for document substitution if applicable

6. Appendix 3 - Communication Protocols: Protocols for communications between parties

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

Import/Export

Manufacturing

Commodities Trading

Shipping & Logistics

Agriculture

Oil & Gas

Textiles

Construction Materials

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Compliance

Legal

Operations

Treasury

Risk Management

Credit Administration

Trade Operations

Relevant Roles

Trade Finance Manager

Documentary Credits Manager

International Banking Officer

Trade Operations Manager

Compliance Officer

Letter of Credit Specialist

Treasury Manager

Import/Export Manager

Trade Finance Analyst

Banking Operations Manager

Senior Credit Officer

International Trade Specialist

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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