Lc Letter Of Credit for Malaysia

Lc Letter Of Credit Template for Malaysia

A Letter of Credit document under Malaysian law is a formal undertaking by a bank (the issuing bank) to make payment to a beneficiary upon presentation of specified documents that comply with the terms and conditions of the credit. This document follows the Malaysian Financial Services Act 2013 and incorporates international banking practices under UCP 600. It serves as a crucial trade finance instrument that provides security to both buyers and sellers in international trade transactions by having a bank act as an intermediary and guarantor of payment.

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What is a Lc Letter Of Credit?

The Letter of Credit (LC) is a fundamental trade finance instrument used extensively in international commerce under Malaysian jurisdiction. When businesses engage in cross-border trade, an LC Letter of Credit provides a secure payment mechanism where the issuing bank guarantees payment to the seller upon presentation of specified documents. This document is particularly crucial when parties don't have established trading relationships or when dealing with high-value transactions. Under Malaysian law, LCs are governed by the Financial Services Act 2013 and follow the internationally recognized Uniform Customs and Practice for Documentary Credits (UCP 600). The document typically includes detailed specifications about payment terms, required documents, shipment conditions, and compliance requirements, providing security and clarity for all parties involved in the transaction.

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

1. Issuing Bank Details: Complete name, address, and SWIFT code of the bank issuing the LC

2. LC Number and Date: Unique reference number and issuance date of the LC

3. Applicant Details: Full name, address, and contact information of the party requesting the LC (typically the buyer)

4. Beneficiary Details: Full name, address, and contact information of the party receiving the LC (typically the seller)

5. Currency and Amount: Specified currency and maximum amount of the LC, written in both figures and words

6. Type of Credit: Specification of whether the LC is irrevocable, confirmed, transferable, etc.

7. Expiry Date and Place: Clear statement of when and where the LC expires

8. Documents Required: Detailed list of all documents required for presentation

9. Goods Description: Clear description of the goods or services covered by the LC

10. Shipment Terms: Latest shipment date, partial shipments, transhipment conditions

11. Payment Terms: When and how payment will be made (at sight, deferred payment, etc.)

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

1. Transferability Clause: Required when the LC needs to be transferable to another beneficiary

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

3. Green Clause: Include when storage of goods is involved with advance payment

4. Revolving Credit Terms: Required for LCs that automatically renew

5. Back-to-Back Provisions: Include when the LC supports a back-to-back LC arrangement

6. Confirmation Instructions: Required when confirmation by another bank is requested

7. Special Conditions: Any additional terms specific to the transaction

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

1. Document Presentation Schedule: Detailed checklist of required documents and presentation timeline

2. Fee Schedule: Breakdown of all applicable bank charges and fees

3. Commercial Invoice Format: Required format and content for commercial invoices

4. Transport Document Requirements: Specific requirements for bills of lading or other transport documents

5. Insurance Document Requirements: Format and coverage requirements for insurance documents

6. Amendment Form: Standard form for requesting amendments to the LC

7. Specimen Signatures: Authorized signatures for the LC operation

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

Import/Export

Retail

Wholesale

Commodities

Agriculture

Mining

Construction

Technology

Automotive

Textile

Energy

Shipping and Logistics

Relevant Teams

Finance

International Trade

Treasury

Compliance

Legal

Risk Management

Operations

Procurement

Supply Chain

Banking Operations

Credit Administration

Trade Operations

Relevant Roles

Trade Finance Manager

International Trade Specialist

Documentary Credit Officer

Import/Export Manager

Treasury Manager

Finance Director

Compliance Officer

Banking Operations Manager

Credit Risk Officer

Trade Operations Specialist

Financial Controller

Supply Chain Manager

Procurement Manager

Chief Financial Officer

Banking Relationship 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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