Advised Letter Of Credit for the Netherlands

Advised Letter Of Credit Template for Netherlands

A Dutch law-governed Advised Letter of Credit is a formal banking instrument used in international trade transactions, where an advising bank notifies the beneficiary of the credit opened by the issuing bank without adding its own commitment to honor the credit. Operating under the Dutch legal framework and international banking regulations (particularly UCP 600), this document provides a structured mechanism for secure international trade payments while incorporating specific requirements of Dutch financial and commercial law. It details the conditions, required documentation, and payment terms that must be met for the beneficiary to receive payment for goods or services.

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What is a Advised Letter Of Credit?

The Advised Letter of Credit serves as a crucial document in international trade finance, providing security to both buyers and sellers in cross-border transactions. Under Dutch law and governed by both local regulations and international banking practices (UCP 600), this instrument is particularly useful when parties seek a balanced approach to trade finance without requiring the additional security of a confirmed credit. The document specifies the conditions under which the issuing bank will make payment, typically including details about the goods, shipping requirements, and necessary documentation. The advising bank's role is limited to authenticating the credit's authenticity and communicating its terms to the beneficiary, without undertaking any payment obligation. This type of Letter of Credit is commonly used when there is sufficient trust in the issuing bank's ability to honor the commitment, but local representation through an advising bank is needed for verification and communication purposes.

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

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

2. Advising Bank Details: Complete name and address of the advising bank

3. Issuing Bank Details: Complete name and address of the issuing bank

4. Beneficiary Details: Full name and address of the beneficiary (seller)

5. Applicant Details: Full name and address of the applicant (buyer)

6. Credit Amount and Currency: Specification of the amount and currency of the Letter of Credit

7. Form of Credit: Specification that this is an irrevocable advised Letter of Credit

8. Expiry Details: Expiry date and place for presentation of documents

9. Payment Terms: Specification of when and how payment will be made (at sight, deferred payment, etc.)

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

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

12. Description of Goods: Clear description of the goods or services covered by the Letter of Credit

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

1. Transferability Clause: Include when the Letter of Credit 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: Include when the Letter of Credit is revolving in value or time

5. Back-to-Back Provisions: Include when this Letter of Credit serves as security for another Letter of Credit

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

7. Special Conditions: Include when there are additional requirements or conditions specific to the transaction

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

1. Schedule A - Commercial Invoice Requirements: Detailed specifications for the format and content of commercial invoices

2. Schedule B - Transport Document Requirements: Specific requirements for bills of lading or other transport documents

3. Schedule C - Insurance Document Requirements: Detailed requirements for insurance certificates or policies

4. Appendix 1 - Goods Specification: Detailed technical specifications of the goods

5. Appendix 2 - Document Presentation Schedule: Timeline and process for document presentation

6. Appendix 3 - Bank Contact Details: Complete contact information for all banks involved in the transaction

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

Cost

Free to use

Relevant legal definitions

Clauses

Relevant Industries

International Trade

Banking and Finance

Manufacturing

Import/Export

Retail

Commodities

Agriculture

Energy

Construction

Technology

Automotive

Pharmaceutical

Relevant Teams

Legal

Finance

Treasury

International Trade

Risk Management

Procurement

Supply Chain

Commercial Banking

Trade Operations

Credit Administration

Documentary Credits

Global Transaction Services

Account Management

Compliance

Relevant Roles

Trade Finance Manager

International Business Development Manager

Import/Export Coordinator

Treasury Manager

Trade Operations Officer

Documentary Credits Specialist

Banking Relationship Manager

Finance Director

Procurement Manager

Supply Chain Manager

Credit Risk Officer

Commercial Banking Officer

Global Trade Advisor

Chief Financial Officer

International Sales Manager

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Notice Of Credit

A Dutch-compliant formal document notifying the recipient of a credit applied to their account, including essential credit and reference information.

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What is a Advised Letter Of Credit?

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

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

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

Authors

Alex Denne

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