Legal Templates
Confirmed Lc

Confirmed Lc for South Africa

Confirmed Lc Template for South Africa

A Confirmed Letter of Credit (LC) under South African law is a formal banking instrument that provides a guaranteed payment mechanism in international trade transactions. It represents an irrevocable undertaking by both the issuing bank and a second bank (the confirming bank) to pay the beneficiary when compliant documents are presented. The document operates within South Africa's legal framework, incorporating elements of the Banks Act 94 of 1990 and Exchange Control Regulations, while also adhering to international standards such as UCP 600. This dual-bank guarantee structure offers enhanced security for international trade transactions, particularly beneficial when dealing with certain geographical regions or economic conditions.

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What is a Confirmed Lc?

The Confirmed LC is a specialized form of documentary credit particularly valuable in international trade scenarios where additional payment security is desired. It is commonly used when trading partners require enhanced assurance due to economic, political, or commercial risks in certain markets. Under South African law, a Confirmed Letter of Credit adds a second bank's guarantee to the issuing bank's commitment, providing the beneficiary with two independent payment undertakings. This document includes detailed specifications for payment conditions, required documentation, shipping terms, and compliance requirements. It's especially relevant for South African entities engaged in international trade where the regulatory framework includes the Banks Act, Exchange Control Regulations, and international banking practices (UCP 600). The confirmation typically comes from a bank in the beneficiary's country or a major international bank, adding an extra layer of security to the transaction.

What sections should be included in a Confirmed Lc?

1. Letter of Credit Number: Unique identification number of the LC

2. Date of Issue: The date when the LC is issued

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

4. Beneficiary Details: Full name, address, and contact information of the party in whose favor the LC is issued (usually the seller)

5. Issuing Bank Details: Name, address, and SWIFT code of the bank issuing the LC

6. Confirming Bank Details: Name, address, and SWIFT code of the bank confirming the LC

7. Currency and Amount: The currency and amount for which the LC is issued, in both figures and words

8. Expiry Date and Place: The date and location where the LC expires

9. Documentary Requirements: Detailed list of documents required for presentation

10. Goods Description: Detailed description of the goods or services covered by the LC

11. Payment Terms: Specific conditions and timing of payment

12. Shipment Terms: Details of shipment including latest shipment date and partial shipments if allowed

13. Presentation Period: Time period within which documents must be presented after shipment

14. Governing Law and Jurisdiction: Specification of South African law as governing law and relevant jurisdiction

What sections are optional to include in a Confirmed Lc?

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

2. Red Clause: Include when advance payment provisions are required

3. Green Clause: Include when storage-related provisions are needed

4. Revolving Terms: Include for LCs that automatically renew under specified conditions

5. Back-to-Back Provisions: Include when the LC is part of a back-to-back arrangement

6. Standby Provisions: Include when the LC serves as a standby guarantee

7. Special Instructions: Include when there are specific handling or processing requirements

8. Force Majeure Clause: Include when specific force majeure provisions are required beyond standard UCP terms

What schedules should be included in a Confirmed Lc?

1. Schedule A - Document Checklist: Detailed checklist of all required documents and their specific requirements

2. Schedule B - Commercial Invoice Requirements: Specific requirements for the format and content of commercial invoices

3. Schedule C - Transport Document Requirements: Detailed requirements for bills of lading or other transport documents

4. Schedule D - Insurance Document Requirements: Specifications for insurance documents if required

5. Schedule E - Certificate Requirements: Requirements for any certificates of origin, inspection, or quality

6. Appendix 1 - SWIFT Message Format: Standard format for SWIFT MT700 series messages

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

8. Appendix 3 - Amendment Procedures: Procedures for requesting and processing amendments to the LC

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

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Jurisdiction

South Africa

Publisher

Genie AI

Document Type

Letter of Credit

Sector

International Trade

Cost

Free to use
Relevant legal definitions
Advising Bank
Applicant
Banking Day
Beneficiary
Bill of Lading
Business Day
Confirmation
Confirming Bank
Complying Presentation
Credit
Discrepancy
Documentary Credit
Documents
Draft
Effective Date
Expiry Date
Force Majeure
Governing Law
Incoterms
Insurance Certificate
Insurance Policy
Issuing Bank
Letter of Credit
Negotiating Bank
Negotiation
Original Documents
Partial Shipment
Presentation
Presenting Bank
Rand
Reimbursing Bank
SWIFT
Shipment
Shipping Documents
South African Reserve Bank
Standby Letter of Credit
Transhipment
UCP 600
Underlying Transaction
ZAR
Clauses
Issuance and Confirmation
Document Examination
Payment Terms
Documentary Requirements
Expiry and Presentation
Bank Obligations
Governing Law and Jurisdiction
Force Majeure
Amendments
Bank Charges
Transferability
Assignment
Compliance with Laws
Anti-Money Laundering
Foreign Exchange Control
Notices
Disclaimer
Default
Dispute Resolution
Representations and Warranties
Sanctions Compliance
Document Preparation
Shipping Terms
Insurance Requirements
Bank Communications
Confidentiality
Severability
Entire Agreement
Waiver
Time Limits
Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Retail

Agriculture

Mining

Energy

Commodities Trading

Logistics and Transportation

Insurance

Maritime Industry

Relevant Teams

Trade Finance

International Banking

Corporate Banking

Risk Management

Compliance

Legal

Treasury

Operations

Documentary Credits

International Trade Operations

Supply Chain

Client Relations

Credit Administration

Relevant Roles

Trade Finance Manager

International Trade Specialist

Finance Director

Treasury Manager

Credit Manager

Commercial Banking Officer

Trade Operations Manager

Documentary Credits Specialist

Relationship Manager

Risk Manager

Compliance Officer

Import Manager

Export Manager

Supply Chain Manager

Chief Financial Officer

Banking Operations Manager

International Business Development Manager

Industries
Banks Act 94 of 1990: Primary legislation governing banking institutions in South Africa, including their ability to issue Letters of Credit and conduct international banking operations
Exchange Control Regulations (Currency and Exchanges Act 9 of 1933): Regulates foreign exchange transactions and international payments, which is crucial for Letters of Credit involving cross-border transactions
Uniform Customs and Practice for Documentary Credits (UCP 600): While not legislation per se, these ICC rules are universally accepted in South Africa for LC transactions and are typically incorporated by reference
Financial Intelligence Centre Act 38 of 2001 (FICA): Governs anti-money laundering requirements and Know Your Customer (KYC) procedures that banks must follow when issuing LCs
International Trade Administration Act 71 of 2002: Regulates South Africa's international trade administration and provides framework for import/export controls relevant to LC transactions
Bills of Exchange Act 34 of 1964: Although primarily for bills of exchange, this Act contains principles applicable to documentary credits and negotiable instruments
Consumer Protection Act 68 of 2008: May be relevant if the LC involves consumer goods and one party is acting within South Africa
Financial Advisory and Intermediary Services Act 37 of 2002: Relevant when financial advisors or intermediaries are involved in structuring or advising on LC transactions
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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