Clean Letter Of Credit Template for Saudi Arabia

The Clean Letter of Credit is a specialized banking instrument commonly used in international trade transactions where the bank commits to pay the beneficiary upon presentation of minimal documentary requirements. Unlike standard documentary credits, a Clean Letter of Credit typically requires only basic documents such as a draft or receipt, making it a more streamlined instrument. This document, governed by Saudi Arabian law and regulated by SAMA, must comply with both Sharia principles and international banking practices, particularly UCP 600. It serves as a crucial tool in facilitating international trade while providing payment security to the beneficiary and financing options to the applicant. The document is particularly valuable in transactions where the parties have established trust or where simplified documentation is preferred.

1. Letter Reference Number: Unique identification number for the Letter of Credit

2. Date of Issuance: The date when the Letter of Credit is issued

3. Applicant Details: Complete name and address of the party requesting the Letter of Credit (usually the buyer)

4. Beneficiary Details: Complete name and address of the party in whose favor the Letter of Credit is issued (usually the seller)

5. Issuing Bank Details: Complete name and address of the bank issuing the Letter of Credit

6. Amount and Currency: The credit amount and currency, stated in both figures and words

7. Expiry Date and Place: The date and location where the Letter of Credit expires

8. Form of Presentation: Specification of how and where documents should be presented

9. Time for Presentation: The period within which documents must be presented

10. Required Documents: Detailed list of documents that must be presented for payment

11. Payment Terms: Specifications of when and how payment will be made

12. Governing Law Statement: Clear statement that the Letter of Credit is subject to Saudi Arabian law and UCP 600