Direct Letter Of Credit for Switzerland

Direct Letter Of Credit Template for Switzerland

A Direct Letter of Credit under Swiss law is a formal banking instrument that provides a secure payment mechanism in international trade transactions. It represents an irrevocable undertaking by a bank to pay the beneficiary (typically the seller) a specified amount upon presentation of compliant documents. Governed by Swiss law and typically incorporating UCP 600 rules, this document provides robust protection for international trade participants while benefiting from Switzerland's sophisticated banking framework and strong legal system. The document details payment conditions, documentary requirements, and timeframes, ensuring clarity and security for all parties involved in the transaction.

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What is a Direct Letter Of Credit?

The Direct Letter of Credit is a fundamental trade finance instrument used to facilitate secure international trade transactions under Swiss jurisdiction. It is particularly utilized when parties seek the security of Switzerland's robust banking system and legal framework. This document type is employed when a buyer (applicant) wants to provide payment security to a seller (beneficiary) through a bank's direct commitment to pay. The Direct Letter of Credit includes specific terms regarding payment conditions, required documentation, timeframes, and compliance requirements. It incorporates both Swiss banking regulations and international standards (typically UCP 600), making it a preferred choice for high-value international trade transactions where parties seek the reliability and neutrality of Swiss banking infrastructure. The document is especially relevant for transactions requiring strong payment security and clear documentary requirements.

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

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

2. Advising Bank Details: Complete details of the advising bank, including SWIFT code and address

3. Applicant Information: Full name, address, and contact details of the party requesting the Letter of Credit

4. Beneficiary Information: Full name, address, and contact details of the party in whose favor the Letter of Credit is issued

5. Currency and Amount: The currency and amount of the Letter of Credit, both in figures and words

6. Expiry Date and Place: The date and location where the Letter of Credit expires

7. Documentary Requirements: Detailed list of required documents for presentation

8. Goods Description: Precise description of the goods or services covered by the Letter of Credit

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

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

11. Governing Law Declaration: Statement that the Letter of Credit is governed by Swiss law and UCP 600

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

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

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

3. Revolving Terms: Include for Letters of Credit that automatically renew under specified conditions

4. Back-to-Back Provisions: Required when the Letter of Credit is part of a back-to-back arrangement

5. Confirmation Instructions: Include when confirmation by another bank is required

6. Special Conditions: Any additional terms or conditions specific to the transaction

7. Insurance Requirements: Detailed insurance requirements when specific coverage is needed

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

1. Schedule A - Document Presentation Requirements: Detailed checklist of required documents and their specific format requirements

2. Schedule B - Standard Banking Forms: Required forms for document presentation and payment processing

3. Schedule C - Shipping Terms and Requirements: Detailed shipping instructions and requirements

4. Appendix 1 - Bank Contact Details: Complete contact information for all banks involved in the transaction

5. Appendix 2 - Fee Schedule: Breakdown of all applicable banking fees and charges

6. Appendix 3 - Amendment Procedures: Standard procedures for requesting and processing amendments to the Letter of Credit

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

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Commodities Trading

Retail

Wholesale

Shipping and Logistics

Agriculture

Energy

Mining

Textile Industry

Construction Materials

Relevant Teams

Trade Finance

International Banking

Corporate Banking

Global Transaction Services

Documentary Credits

Treasury

Risk Management

Legal

Compliance

Operations

Supply Chain

Procurement

Finance

Relevant Roles

Trade Finance Manager

International Banking Officer

Documentary Credits Specialist

Import/Export Manager

Treasury Manager

Trade Operations Officer

Relationship Manager - Corporate Banking

Credit Risk Officer

Global Transaction Banking Officer

Chief Financial Officer

Finance Director

Banking Compliance Officer

International Trade Specialist

Supply Chain Manager

Procurement 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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