Document background
The Evergreen Letter of Credit is utilized in situations requiring long-term, continuous documentary credit support for ongoing business relationships. This instrument, governed by Saudi Arabian law and overseen by SAMA, automatically renews for specified periods unless terminated by either party with appropriate notice. It provides security for recurring transactions while reducing the administrative burden of frequent renewals. The document must comply with both international banking practices and Islamic finance principles, making it particularly suitable for use in the Saudi Arabian market. It includes comprehensive terms for automatic renewal, drawing conditions, documentation requirements, and payment mechanisms, while incorporating necessary Shariah-compliant structures. This type of Letter of Credit is particularly valuable for established trading relationships requiring consistent, long-term documentary credit support.
