Divisible Letter Of Credit for Malta

Divisible Letter Of Credit Template for Malta

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Divisible Letter Of Credit

"I need a Divisible Letter of Credit for USD 2.5 million for importing industrial machinery from Germany in four installments, with the first shipment scheduled for March 2025, requiring strict quality inspection certificates for each partial shipment."

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What is a Divisible Letter Of Credit?

The Divisible Letter of Credit is a specialized form of documentary credit utilized in international trade transactions where goods are delivered in installments or where multiple drawings are required. This instrument, governed by Maltese law and international banking practices, enables exporters to receive payment for partial shipments while providing importers with the flexibility to manage cash flow and logistics more effectively. The document incorporates provisions from Malta's Banking Act, EU regulations, and the UCP 600, making it particularly suitable for complex international trade transactions involving staged deliveries or multiple payment phases. It includes detailed terms for partial drawings, specific documentary requirements for each presentation, and conditions for accepting or rejecting partial shipments.

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

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

2. Issuing Bank Details: Complete details of the bank issuing the Letter of Credit

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

4. Applicant Details: Full name and address of the party requesting the Letter of Credit

5. Credit Amount and Currency: Total value of the Letter of Credit and currency specification

6. Divisibility Terms: Specific conditions and terms regarding the divisible nature of the credit

7. Partial Shipment Terms: Conditions and requirements for partial shipments

8. Drawing Terms: Specifications for how and when drawings can be made under the credit

9. Required Documents: List of documents required for each drawing under the credit

10. Expiry Date and Place: Validity period of the Letter of Credit and location for presentation

11. Governing Law and UCP Reference: Reference to Maltese law and UCP 600 application

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

1. Advising Bank Details: Details of the advising bank if the credit is advised through another bank

2. Confirmation Instructions: Instructions regarding confirmation if the credit is to be confirmed

3. Transferability Clause: Terms for transfer if the credit is transferable

4. Revolving Terms: Specific terms if the credit is both divisible and revolving

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

6. Back-to-Back Provisions: Terms for back-to-back arrangements if applicable

7. Red Clause Provisions: Terms for advance payment if red clause provisions are included

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

1. Schedule A - Documentary Requirements: Detailed list of required documents and their specifications for each drawing

2. Schedule B - Drawing Schedule: Predetermined schedule of permitted drawings and their maximum amounts

3. Schedule C - Shipping Terms: Detailed shipping requirements and schedule for partial shipments

4. Appendix 1 - Form of Drawing Request: Standard format for submitting drawing requests under the credit

5. Appendix 2 - Form of Documentary Presentation: Standard format for presenting documents under the credit

6. Appendix 3 - Form of Beneficiary Certificate: Template for beneficiary certifications required for drawings

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

Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Shipping and Logistics

Import/Export

Commodities Trading

Agricultural Products

Industrial Equipment

Construction Materials

Textile Industry

Energy and Resources

Wholesale Distribution

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Credit Risk

Legal and Compliance

Treasury Operations

Trade Operations

Client Relations

Financial Control

Supply Chain Operations

Relevant Roles

Trade Finance Manager

International Banking Officer

Documentary Credits Specialist

Import/Export Manager

Treasury Manager

Credit Risk Officer

Trade Operations Manager

Banking Relationship Manager

Compliance Officer

Financial Controller

Supply Chain Manager

Chief Financial Officer

International Trade Specialist

Banking Operations 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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