Legal Templates
Irrevocable Letter Of Credit

Irrevocable Letter Of Credit for South Africa

Irrevocable Letter Of Credit Template for South Africa

A formal banking instrument governed by South African banking laws and international trade practices (UCP 600), which provides an irrevocable payment undertaking from a bank to pay a specified sum of money to a beneficiary, typically in international trade transactions. The document is subject to South African banking regulations, including the Banks Act 94 of 1990 and Exchange Control Regulations, while also adhering to international standards. It serves as a secure payment mechanism in cross-border trade, providing certainty to exporters about payment and assurance to importers about the conditions of payment.

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What is a Irrevocable Letter Of Credit?

An Irrevocable Letter of Credit is a crucial document in international trade finance, particularly relevant in the South African context where cross-border trade requires secure payment mechanisms. This document is used when parties seek a guaranteed payment method in international transactions, with the issuing bank making an irrevocable commitment to pay the beneficiary upon presentation of compliant documents. Under South African law, these instruments are regulated by the Banks Act 94 of 1990 and must comply with Exchange Control Regulations and the Currency and Exchanges Act 9 of 1933. The document is particularly important in transactions where parties don't have established trading relationships or when local regulations require formal banking channels for international payments.

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

1. Letter Reference Number: Unique identification number assigned by the issuing bank

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

3. Issuing Bank Details: Complete name, address, and contact information of the bank issuing the LC

4. Beneficiary Details: Full name and address of the party receiving payment under the LC

5. Applicant Details: Full name and address of the party requesting the LC

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

7. Form of Credit: Specification that this is an irrevocable letter of credit

8. Expiry Date: Date and place of expiry of the Letter of Credit

9. Documentation Requirements: Detailed list of documents required for payment

10. Payment Terms: Specific conditions and timing of payment

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

12. Presentation Period: Time period within which documents must be presented

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

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

2. Revolving Credit Terms: Include when the LC is revolving rather than single-use

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

4. Green Clause: Include when warehouse storage provisions are needed

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

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

7. Special Conditions: Include when there are additional terms specific to the transaction

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

1. Document Checklist: Detailed list of required documents with specific format requirements

2. Description of Goods: Detailed specification of the goods covered by the LC

3. Banking Instructions: Specific instructions for document handling and payment processing

4. Fee Schedule: Breakdown of all applicable banking charges and fees

5. Amendment Format: Standard format for any future 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
Clean Documents
Commercial Invoice
Complying Presentation
Confirmation
Confirming Bank
Credit
Discrepancy
Documents
Draft
Expiry Date
Force Majeure
Goods
Honour
Issuing Bank
Negotiating Bank
Nominated Bank
Presentation
Presentation Period
Reimbursing Bank
Shipment
Sight Payment
Transfer
UCP 600
Usance Payment
Banking Hours
Place of Expiry
Port of Loading
Port of Discharge
Transport Documents
Insurance Documents
Certificate of Origin
Packing List
Inspection Certificate
Amendment
Applicable Law
Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Mining and Resources

Agriculture and Agribusiness

Retail and Consumer Goods

Energy and Utilities

Automotive

Textile and Clothing

Electronics and Technology

Chemical and Pharmaceuticals

Construction and Engineering

Relevant Teams

Trade Finance

International Banking

Treasury

Legal

Compliance

Risk Management

Commercial Operations

Finance

Procurement

Supply Chain

International Sales

Documentary Credits

Relevant Roles

Trade Finance Manager

International Business Development Manager

Import/Export Coordinator

Treasury Manager

Financial Controller

Banking Relationship Manager

Trade Operations Officer

Documentary Credits Specialist

Compliance Officer

Risk Manager

Chief Financial Officer

Commercial Director

Supply Chain Manager

Procurement Manager

Legal Counsel

Credit Control Manager

Industries
Banks Act 94 of 1990: The primary legislation governing banking activities in South Africa, including the issuance of letters of credit by registered banks
UCP 600 (Uniform Customs and Practice for Documentary Credits): International Chamber of Commerce rules that standardize the handling of Letters of Credit globally, which South African banks adhere to
Currency and Exchanges Act 9 of 1933: Regulates foreign exchange transactions and cross-border payments in South Africa, relevant for international letters of credit
Exchange Control Regulations: South African Reserve Bank regulations governing foreign exchange transactions and international payments
Financial Intelligence Centre Act 38 of 2001: Covers anti-money laundering requirements and Know Your Customer (KYC) procedures for banking transactions
National Payment System Act 78 of 1998: Governs the payment and settlement systems in South Africa, including international payments
Protection of Personal Information Act 4 of 2013: Regulates the processing of personal information, relevant for collecting and handling client data in banking 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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