Legal Templates
International Letter Of Credit

International Letter Of Credit for South Africa

International Letter Of Credit Template for South Africa

A South African-governed International Letter of Credit is a formal banking instrument that provides a secure method of payment in international trade transactions. It represents an irrevocable undertaking by a bank to pay the beneficiary a specified amount upon presentation of compliant documents. The document is governed by South African banking and foreign exchange regulations, while also adhering to international standards such as UCP 600. It includes detailed specifications for payment conditions, required documentation, and compliance requirements, providing security for both exporters and importers in international trade transactions.

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What is a International Letter Of Credit?

The International Letter of Credit is a crucial document in international trade finance, particularly within the South African context where it must comply with both local banking regulations and international standards. This document is typically used when there is a need for secure payment mechanisms in cross-border transactions, especially when parties don't have established trading relationships or when local regulations require formal banking channels for international payments. The Letter of Credit provides security to both the exporter (who is assured of payment upon presenting compliant documents) and the importer (who knows payment will only be made when specified conditions are met). It must conform to South African foreign exchange regulations and banking laws while following international banking practices outlined in UCP 600. The document specifies all payment conditions, document requirements, and compliance criteria, making it a comprehensive instrument for managing international trade risks.

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

1. Issuing Bank Details: Complete identification and contact details of the issuing bank

2. Beneficiary Details: Full name and address of the party in whose favor the credit is issued (typically the seller/exporter)

3. Applicant Details: Full name and address of the party requesting the credit (typically the buyer/importer)

4. Credit Number and Type: Unique identification number of the credit and specification of credit type (irrevocable, confirmed/unconfirmed)

5. Amount and Currency: The credit amount and currency, including any tolerance levels if applicable

6. Availability and Expiry: How and where the credit is available, and the expiry date and place

7. Shipment Terms: Latest shipment date, partial shipments, transhipment provisions

8. Required Documents: Detailed list of documents required for presentation

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

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

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

1. Transferability Clause: Required if the credit is transferable, specifying terms and conditions of transfer

2. Revolving Credit Terms: Required for revolving credits, specifying reinstatement terms and conditions

3. Red Clause Provisions: Required for red clause credits, detailing advance payment terms

4. Back-to-Back Provisions: Required for back-to-back credits, specifying related credit arrangements

5. Confirmation Instructions: Required when confirmation is requested, including confirming bank details

6. Special Conditions: Any additional terms or conditions specific to the transaction

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

1. Schedule A - Document Requirements: Detailed specifications for each required document, including format and content requirements

2. Schedule B - Goods Description: Detailed description of the goods or services being traded

3. Schedule C - Special Payment Conditions: Any special conditions relating to payment, including partial payments if applicable

4. Appendix 1 - Standard Banking Forms: Standard forms required for document presentation

5. Appendix 2 - UCP 600 Reference: Relevant articles of UCP 600 applicable to this specific credit

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 Exchange
Bill of Lading
Certificate of Origin
Commercial Invoice
Complying Presentation
Confirmation
Credit
Documentary Credit
Documents
Draft
Expiry Date
Honour
Insurance Document
Issuing Bank
Negotiation
Nominated Bank
Original Documents
Packing List
Presentation
Presenting Bank
Reimbursing Bank
Shipping Documents
Sight Payment
Transfer
UCP 600
Usance Payment
Banking Hours
Business Day
Place of Expiry
Port of Loading
Port of Discharge
Shipment
Transport Document
Transferable Credit
Clean Documents
Discrepant Documents
Force Majeure
Incoterms
Letter of Indemnity
Notify Party
Payment Terms
Tender
Transhipment
Undertaking
Clauses
Operative Clauses
Credit Amount
Availability
Expiry
Document Requirements
Payment Terms
Bank Obligations
Presentation Requirements
Examination of Documents
Notice Requirements
Transfer Rights
Assignment
Force Majeure
Applicable Rules
Governing Law
Jurisdiction
Amendment Provisions
Disclaimer
Bank Liability
Reimbursement
Charges and Fees
Document Discrepancies
Currency Provisions
Communication Methods
Default Events
Termination
Confirmation
Anti-Money Laundering
Sanctions Compliance
Document Authenticity
Time Limits
Banking Hours
Partial Shipments
Transhipment
Insurance Coverage
Notice of Rejection
Document Retention
Compliance with Exchange Control
Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Import/Export

Commodities Trading

Retail

Agriculture

Mining

Oil and Gas

Textiles

Electronics

Automotive

Chemical Industry

Consumer Goods

Relevant Teams

Trade Finance

International Banking

Legal

Compliance

Treasury

Risk Management

Operations

Documentary Credits

Export Finance

Import Finance

Financial Control

International Business Development

Relevant Roles

Trade Finance Manager

International Trade Specialist

Documentary Credits Officer

Export Finance Manager

Import Finance Manager

Trade Operations Manager

Compliance Officer

Banking Relationship Manager

Treasury Manager

Chief Financial Officer

Financial Controller

Trade Finance Analyst

Risk Manager

Legal Counsel

Documentary Collections Specialist

International Business Development Manager

Industries
UCP 600 (Uniform Customs and Practice for Documentary Credits): The international rules that govern the operation of Letters of Credit, published by the International Chamber of Commerce. These rules are universally recognized and applied in international trade finance.
Banks Act 94 of 1990: South African legislation that regulates banking institutions and their operations, including their ability to issue Letters of Credit and other financial instruments.
Currency and Exchanges Act 9 of 1933: South African legislation governing foreign exchange transactions and international payments, which is crucial for international Letters of Credit.
Financial Intelligence Centre Act 38 of 2001 (FICA): South African anti-money laundering legislation that requires proper customer due diligence and reporting of suspicious transactions in financial dealings.
Exchange Control Regulations: South African regulations that control foreign exchange transactions and international payment arrangements, administered by the South African Reserve Bank.
International Trade Administration Act 71 of 2002: South African legislation governing international trade practices and requirements, which may affect the terms and conditions of the Letter of Credit.
Electronic Communications and Transactions Act 25 of 2002: Relevant for electronic documentation and communications related to the Letter of Credit, especially important in modern banking practices.
Consumer Protection Act 68 of 2008: May be applicable if one of the parties falls under consumer protection in the context of the transaction being financed.
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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