Lc Facility for Switzerland

Lc Facility Template for Switzerland

A Letter of Credit Facility Agreement under Swiss law is a comprehensive banking document that establishes the terms and conditions under which a bank (or consortium of banks) agrees to issue letters of credit on behalf of a borrower. The agreement, governed by Swiss law and incorporating international banking practices (UCP 600), details the facility amount, issuance procedures, fees, security requirements, and ongoing obligations of all parties. It includes specific provisions required under Swiss banking regulations and the Swiss Code of Obligations, making it particularly suitable for international trade transactions where Swiss banking expertise is valued.

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What is a Lc Facility?

The LC Facility Agreement is essential for businesses engaged in international trade and requiring documentary credits for their operations. This agreement, governed by Swiss law, provides the legal framework for a bank or banking syndicate to issue letters of credit up to an agreed facility amount. It encompasses all necessary terms including facility limits, conditions for issuance, fees, security arrangements, and compliance requirements. The document is particularly valuable in Switzerland's context as a major international banking center, incorporating both local regulatory requirements and international banking practices (UCP 600). The agreement typically supports import/export operations, large-scale trading activities, or project financing where letters of credit are required as payment security or performance support.

What sections should be included in a Lc Facility?

1. Parties: Identification of the borrower, lender/LC issuing bank, and any other parties

2. Background: Context of the facility and purpose of the agreement

3. Definitions and Interpretation: Defined terms, construction rules, and reference to UCP 600

4. The Facility: Basic terms of the LC facility including amount, purpose, and availability period

5. Utilisation: Process and conditions for requesting LC issuance

6. Letters of Credit: Provisions regarding LC issuance, form, duration, and renewal

7. Fees and Commissions: LC issuance fees, commitment fees, and other charges

8. Payment and Cash Cover: Payment mechanics and cash collateral requirements

9. Representations: Standard and LC-specific representations by the borrower

10. Undertakings: General and specific covenants applicable to the facility

11. Events of Default: Default triggers and consequences

12. Changes to Parties: Transfer and assignment provisions

13. Administration: Administrative provisions including notices and calculations

14. Governing Law and Jurisdiction: Swiss law and jurisdiction provisions

What sections are optional to include in a Lc Facility?

1. Security: Required if the facility is secured by collateral or guarantees

2. Increased Costs and Tax Gross-up: Include if there are cross-border elements or tax implications

3. Multiple Currency Provisions: Required if LCs can be issued in multiple currencies

4. Bank Guarantee Provisions: Include if the facility allows for bank guarantees alongside LCs

5. Agent Provisions: Required in case of multiple lenders/banks

6. Compliance Provisions: Enhanced compliance sections for specific industry sectors or high-risk jurisdictions

What schedules should be included in a Lc Facility?

1. Form of Utilisation Request: Standard form for requesting LC issuance

2. Form of Letter of Credit: Template LC format acceptable to the issuing bank

3. Conditions Precedent: List of required documents and conditions

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

5. Form of Transfer Certificate: Template for transferring rights under the facility

6. Approved LC Beneficiaries: If applicable, list of pre-approved LC beneficiaries

7. Compliance Documents: Required forms and certificates for ongoing compliance

8. Security Documents: If secured, forms of security documentation

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
Clauses
Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Import/Export

Commodities Trading

Retail

Construction

Energy

Shipping and Logistics

Agriculture

Mining and Resources

Relevant Teams

Legal

Finance

Treasury

Trade Finance

Compliance

Risk Management

Corporate Banking

Credit Administration

Operations

International Banking

Documentary Credits

Relevant Roles

Chief Financial Officer

Treasury Manager

Trade Finance Manager

Finance Director

Legal Counsel

Compliance Officer

Credit Risk Manager

Relationship Manager (Banking)

Trade Operations Manager

Corporate Banking Officer

Documentary Credits Specialist

Senior Finance Manager

Banking Operations Manager

Import/Export 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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