Irrevocable Letter Of Credit Cost for South Africa

Irrevocable Letter Of Credit Cost Template for South Africa

An Irrevocable Letter of Credit Cost document, governed by South African law, is a formal banking instrument that provides a guaranteed payment mechanism in international trade transactions. It represents an irrevocable undertaking by a bank to pay a specified sum to a beneficiary upon presentation of compliant documents. The document incorporates South African banking regulations, Exchange Control requirements, and typically follows UCP 600 guidelines. It details the terms, conditions, and costs associated with the letter of credit facility, including bank charges, commission rates, and other applicable fees.

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What is a Irrevocable Letter Of Credit Cost?

The Irrevocable Letter of Credit Cost document is essential for international trade transactions conducted under South African jurisdiction. It is typically used when parties require a secure payment method with clearly defined costs and charges. The document outlines the financial obligations, including all bank charges, commission rates, and processing fees associated with the letter of credit facility. An Irrevocable Letter of Credit Cost agreement is particularly important in the South African context due to specific Exchange Control regulations and local banking requirements. The document provides certainty to all parties regarding the costs involved in the LC transaction, helping businesses budget accurately for their international trade operations while ensuring compliance with both local regulations and international banking practices such as UCP 600.

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

1. Letter Reference Number and Date: Unique identification number of the LC and issuance date

2. Issuing Bank Details: Full name, address, and contact information of the issuing bank

3. Beneficiary Details: Full name, address, and contact information of the beneficiary (seller/exporter)

4. Applicant Details: Full name, address, and contact information of the applicant (buyer/importer)

5. Credit Amount and Currency: The maximum amount and currency of the letter of credit

6. Expiry Date and Place: The date and location where the credit expires

7. Available With/By: Specifies whether the credit is available by sight payment, deferred payment, acceptance, or negotiation

8. Required Documents: List of documents that must be presented for payment

9. Shipment Terms: Details of shipment including latest shipment date and partial shipments/transhipment permissions

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

11. Description of Goods/Services: Detailed description of the goods or services covered by the LC

12. Governing Law and Jurisdiction: Specification of applicable law (South African) and jurisdiction

13. UCP 600 Declaration: Statement that the LC is subject to UCP 600

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

1. Transferability Clause: To be included if the LC is transferable to another beneficiary

2. Revolving Credit Terms: Include when the LC is revolving, specifying the revolving terms and conditions

3. Red Clause Provisions: Include when advance payment is permitted under the LC

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

5. Green Clause Provisions: Include when storage of goods is involved with advance payment facilities

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

7. Special Payment Conditions: Include when there are specific payment terms or conditions

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

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

1. Schedule A - Document Requirements: Detailed list and specifications of all required documents including format and content requirements

2. Schedule B - Goods Specification: Detailed technical specifications of goods or services covered by the LC

3. Schedule C - Special Payment Terms: Detailed breakdown of payment terms if involving multiple drawdowns or special conditions

4. Appendix 1 - Form of Demand: Standard format for presentation of payment demand under the LC

5. Appendix 2 - Form of Transport Documents: Prescribed formats for transport documents if specific requirements exist

6. Appendix 3 - Form of Insurance Documents: Prescribed formats for insurance documents if specific requirements exist

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

Jurisdiction

South Africa

Publisher

Genie AI

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Commodities Trading

Retail

Agriculture

Mining

Energy

Shipping and Logistics

Relevant Teams

Legal

Finance

International Trade

Treasury

Risk Management

Compliance

Trade Operations

Banking Operations

Credit Administration

Documentary Credits

Relevant Roles

Trade Finance Manager

International Trade Specialist

Finance Director

Treasury Manager

Import/Export Manager

Credit Manager

Banking Operations Manager

Financial Controller

Trade Operations Officer

Risk Management Officer

Compliance Officer

Documentary Credits Specialist

Chief Financial Officer

Banking Relationship Manager

International Business Development Manager

Industries
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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