Transferable Lc for Malaysia

Transferable Lc Template for Malaysia

A Transferable Letter of Credit document governed by Malaysian law is a specialized financial instrument that enables the first beneficiary to transfer all or part of the credit to a second beneficiary. This document, operating under Malaysian jurisdiction and compliant with both conventional and Islamic banking principles, provides a secure method of payment in international trade transactions. It includes detailed terms and conditions for transfer, documentation requirements, and compliance with Malaysian Financial Services Act 2013 and UCP 600 guidelines, while incorporating necessary safeguards for all parties involved in the transaction.

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What is a Transferable Lc?

The Transferable LC is a crucial document in international trade finance, particularly relevant in Malaysia's dynamic trading environment. It serves as a vital instrument when intermediate parties are involved in the trade transaction, allowing the first beneficiary to transfer their rights to a second beneficiary. This document type is especially important in Malaysia's dual banking system, accommodating both conventional and Islamic banking requirements. The document must comply with Malaysian law, particularly the Financial Services Act 2013 and Islamic Financial Services Act 2013, while adhering to international standards like UCP 600. It's commonly used in transactions where the first beneficiary acts as a middleman or trader, needing to transfer the credit to the actual supplier of goods or services.

What sections should be included in a Transferable Lc?

1. Letter of Credit Number and Date: Unique identification number and issuance date of the LC

2. Issuing Bank Details: Complete name, address, and contact information of the issuing bank

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

4. First Beneficiary Details: Complete information of the original beneficiary

5. Amount and Currency: Maximum credit amount and currency denomination

6. Transferability Clause: Explicit statement that the credit is transferable and conditions of transfer

7. Expiry Date and Place: Validity period and location where the credit expires

8. Documentation Requirements: Specific documents required for presentation and their characteristics

9. Shipment Terms: Details of shipment, latest shipment date, and partial shipments if allowed

10. Transfer Conditions: Terms and conditions under which the credit may be transferred

11. Presentation Period: Timeframe within which documents must be presented after shipment

12. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction

What sections are optional to include in a Transferable Lc?

1. Islamic Banking Compliance: Required when the LC is issued under Islamic banking principles, specifying Shariah compliance requirements

2. Multiple Transfer Provisions: Include when the LC allows for transfer to more than one second beneficiary

3. Special Instructions: Any specific requirements or conditions unique to the transaction

4. Bank-to-Bank Reimbursement: Include when specific reimbursement arrangements between banks need to be detailed

5. Confirmation Instructions: Required when confirmation from another bank is requested

6. Foreign Exchange Provisions: Include when the LC involves currency conversion or specific exchange rate terms

What schedules should be included in a Transferable Lc?

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

2. Schedule B - Transfer Application Form: Standard form to be used when requesting transfer of the credit

3. Schedule C - Fee Schedule: Breakdown of all applicable fees and charges

4. Appendix 1 - UCP 600 Incorporation: Specific UCP 600 articles applicable to this LC

5. Appendix 2 - Specimen Signatures: Authorized signatures for the issuing bank and first beneficiary

6. Appendix 3 - Transfer Instructions: Detailed procedures and requirements for executing transfers

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 legal definitions
Clauses
Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Import/Export

Logistics and Supply Chain

Commodities Trading

Retail

Agriculture

Mining and Resources

Textiles and Garments

Electronics and Technology

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Compliance

Risk Management

Treasury

Legal

Operations

Islamic Banking

Credit Administration

Trade Operations

Customer Relations

Relevant Roles

Trade Finance Manager

International Banking Officer

Letter of Credit Specialist

Compliance Officer

Trade Operations Manager

Documentary Credits Manager

Foreign Exchange Manager

Risk Management Officer

Treasury Manager

Export Finance Specialist

Import Finance Manager

Banking Relationship Manager

Trade Documentation Specialist

Islamic Banking Officer

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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