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Verbiage Letter Of Credit for United Arab Emirates

Verbiage Letter Of Credit Template for United Arab Emirates

A Letter of Credit document governed by UAE law serves as a formal banking instrument that provides a payment guarantee in international trade transactions. It represents an irrevocable commitment by a bank to pay the beneficiary (seller) a specified amount upon presentation of compliant documents. The document follows UAE Federal Law No. 18 of 1993 (Commercial Code) and incorporates international banking practices (UCP 600), while adhering to UAE Central Bank regulations. It includes detailed terms regarding payment conditions, document requirements, and specific obligations of all parties involved in the transaction.

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Verbiage Letter Of Credit

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What is a Verbiage Letter Of Credit?

The Verbiage Letter of Credit is a fundamental document in UAE international trade finance, used when businesses require secure payment methods for cross-border transactions. It serves as a bank-issued guarantee of payment, typically used in situations where the buyer and seller may not have established trust relationships or are operating in different jurisdictions. The document is structured according to UAE Federal Law No. 18 of 1993 and follows international UCP 600 guidelines, providing a standardized format that's recognized globally while maintaining compliance with UAE banking regulations. This instrument is particularly crucial in the UAE's trade-focused economy, where it facilitates secure international commerce across various sectors, from oil and gas to general merchandise.

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

1. Bank Letter Head and Reference: Bank's official letterhead, LC number, and date of issuance

2. Beneficiary Details: Full name and address of the seller/beneficiary

3. LC Type and Rules: Specification of LC type (irrevocable, transferable, etc.) and governing rules (typically UCP 600)

4. Amount and Currency: Maximum credit amount and currency denomination

5. Expiry Details: Expiry date and place for document presentation

6. Applicant Details: Full name and address of the buyer/applicant

7. Available With/By: Specification of nominated bank and payment terms (sight, deferred, etc.)

8. Shipment Terms: Latest shipment date, partial shipments, transhipment conditions

9. Required Documents: List of all required documents for LC compliance

10. Additional Conditions: Specific conditions and requirements for the transaction

11. Bank Authorization: Authorized signatures and authentication

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

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

2. Red Clause: Used when advance payment to the beneficiary is permitted

3. Green Clause: Include when storage of goods at destination is part of the arrangement

4. Revolving Credit Terms: Include for recurring transactions with automatic reinstatement

5. Back-to-Back Arrangements: When the LC supports a back-to-back credit structure

6. Confirmation Instructions: When confirmation by another bank is required

7. Reimbursement Instructions: Include when specific reimbursement arrangements are needed

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

1. Document Requirements Schedule: Detailed list and format of required documents

2. Goods Description Schedule: Detailed description of goods/services covered by the LC

3. Price Schedule: Breakdown of prices if multiple items or pricing components exist

4. Special Conditions Appendix: Any special terms, conditions or requirements specific to the transaction

5. Banking Instructions Appendix: Detailed instructions for document handling and payment processing

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions






































Clauses




























Relevant Industries

Banking & Financial Services

International Trade

Import/Export

Manufacturing

Retail

Commodities Trading

Oil & Gas

Construction

Agriculture

Shipping & Logistics

Wholesale Distribution

Relevant Teams

Trade Finance

International Banking

Corporate Banking

Risk Management

Legal & Compliance

Treasury

Financial Operations

Credit Administration

Documentary Credits

Supply Chain

Procurement

Finance

Relevant Roles

Trade Finance Manager

Import/Export Manager

Documentary Credits Specialist

Banking Operations Manager

International Trade Specialist

Compliance Officer

Treasury Manager

Financial Controller

Credit Manager

Supply Chain Manager

Procurement Manager

Chief Financial Officer

Banking Relationship Manager

Trade Operations Officer

Risk Management Officer

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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