Acceptance Lc for Malaysia

Acceptance Lc Template for Malaysia

An Acceptance Letter of Credit is a specialized banking instrument governed by Malaysian law and international banking practices (UCP 600), which provides a mechanism for secure international trade transactions. This document represents a bank's commitment to accept time drafts drawn by the beneficiary, effectively creating a banker's acceptance that can be discounted for immediate financing. The document incorporates Malaysian legal requirements while adhering to international banking standards, making it particularly suitable for Malaysian entities engaged in international trade where deferred payment terms are required.

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Acceptance Lc

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What is a Acceptance Lc?

The Acceptance LC (Letter of Credit) is a crucial trade finance instrument used in international commerce, particularly relevant under Malaysian jurisdiction where it combines local legal requirements with international banking practices. This document is typically employed when an importer requires deferred payment terms while ensuring the exporter receives a bankable instrument. The Acceptance LC differs from a standard LC as it involves the bank's commitment to accept time drafts drawn by the beneficiary, creating a negotiable banker's acceptance that can be discounted in the money market. This arrangement is particularly valuable in Malaysian trade finance as it provides flexibility in payment terms while maintaining security for all parties involved. The document must comply with both the Financial Services Act 2013 of Malaysia and international banking standards such as UCP 600.

What sections should be included in a Acceptance Lc?

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

2. Applicant Details: Full name, address, and registration details of the party requesting the LC

3. Beneficiary Details: Complete information of the party in whose favor the LC is issued

4. Credit Amount and Currency: Specification of the LC amount and currency of payment

5. Type of Credit: Clear specification that this is an acceptance credit and its form (e.g., sight, usance)

6. Drafts Requirements: Specifications for bills of exchange including tenor and drawing instructions

7. Documents Required: List of required documents for presentation (shipping docs, commercial invoice, etc.)

8. Goods Description: Brief description of the underlying transaction and goods

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

10. Presentation Period: Time period within which documents must be presented

11. Expiry Details: Expiry date and place of the credit

12. Banking Instructions: Instructions for negotiation, acceptance, and payment

13. Governing Law: Specification of Malaysian law as governing law and relevant regulations (UCP 600)

What sections are optional to include in a Acceptance Lc?

1. Special Conditions: Additional terms specific to the transaction or required by either party

2. Transferability Clause: Include when the LC needs to be transferable to a second beneficiary

3. Back-to-Back Provisions: Required when the LC is part of a back-to-back LC arrangement

4. Red Clause Provisions: Include when advance payment facilities are to be provided

5. Revolving Credit Terms: Include when the LC is designed to revolve in value or time

6. Islamic Banking Compliance: Required when the LC needs to comply with Shariah principles

7. Force Majeure Provisions: Extended force majeure terms when required by the transaction nature

What schedules should be included in a Acceptance Lc?

1. Schedule A - Document Requirements: Detailed list and format of all required documents for presentation

2. Schedule B - Banking Charges: Breakdown of all applicable banking charges and their allocation

3. Schedule C - Goods Specification: Detailed description of goods, quantities, and technical specifications

4. Appendix 1 - Draft Bill of Exchange Format: Template for the bill of exchange to be presented

5. Appendix 2 - Presentation Schedule: Detailed timeline for document presentation and processing

6. Appendix 3 - Authorized Signatories: List of authorized signatories and specimen signatures

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

Malaysia

Publisher

Genie AI

Document Type

Letter of Credit

Cost

Free to use
Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Agriculture and Food

Textile and Apparel

Electronics and Technology

Oil and Gas

Commodities Trading

Automotive

Chemical Industry

Construction Materials

Mining and Minerals

Retail

Pharmaceutical

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Risk Management

Corporate Banking

Treasury Operations

Legal and Compliance

Trade Operations

Credit Administration

Global Transaction Services

Relevant Roles

Trade Finance Manager

International Banking Officer

Documentary Credits Specialist

Export Finance Manager

Import Finance Manager

Trade Operations Officer

Credit Risk Officer

Relationship Manager - Corporate Banking

Treasury Manager

Trade Compliance Officer

Banking Operations Manager

Financial Controller

Chief Financial Officer

International Trade Specialist

Supply Chain Finance Manager

Letter of Credit 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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