The Verbiage Letter of Credit is a fundamental document in international trade finance, particularly within the Dutch legal framework. It is used when parties require a secure payment method in cross-border transactions, providing assurance to sellers that they will receive payment and to buyers that payment will only be made against specified documents. The document is structured according to Dutch banking regulations, EU financial laws, and international banking standards (particularly UCP 600), making it suitable for both European and global trade transactions. It typically includes detailed specifications about payment terms, document requirements, and compliance conditions, while incorporating specific Dutch legal requirements for financial instruments. This document type is especially relevant when dealing with Dutch-based banks or companies engaged in international trade, offering a standardized yet customizable approach to trade finance.
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1. Letter Reference and Date: Unique reference number and date of issuance
2. Beneficiary Details: Full name and address of the party in whose favor the LC is issued
3. Applicant Details: Full name and address of the party requesting the LC
4. Issuing Bank Details: Name, address and contact information of the issuing bank
5. Amount and Currency: Maximum amount and currency of the LC
6. Expiry Date and Place: Clear statement of expiry date and location where documents must be presented
7. Documentary Requirements: Detailed list of required documents for presentation
8. Shipment Terms: Details of goods, shipment dates, partial shipments, transshipment permissions
9. Payment Terms: Specification of when and how payment will be made (at sight, deferred, etc.)
10. Governing Law Statement: Reference to Dutch law and UCP 600 governance
11. Authorization: Bank officer's signature and authentication
1. Advising Bank Details: Include when LC is advised through another bank
2. Confirmation Instructions: Include when confirmation is requested from another bank
3. Transfer Conditions: Include for transferable LCs, specifying transfer terms and conditions
4. Revolving Terms: Include for revolving LCs, specifying reinstatement conditions
5. Red Clause Provisions: Include for red clause LCs, specifying advance payment terms
6. Back-to-Back Provisions: Include for back-to-back LCs, specifying relationship with master LC
7. Special Conditions: Include any special requirements or conditions specific to the transaction
1. Schedule A - Document Presentation Requirements: Detailed checklist of required documents and their specific requirements
2. Schedule B - Standard Banking Forms: Required banking forms for document presentation
3. Schedule C - Goods Description: Detailed description of goods or services covered by the LC
4. Appendix 1 - Amendment Format: Standard format for future amendments to the LC
5. Appendix 2 - Fee Schedule: Schedule of bank charges and fees applicable to the LC
6. Appendix 3 - Presentation Timeline: Timeline showing key dates for document presentation and payment
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Import/Export
Manufacturing
Commodities Trading
Shipping and Logistics
Wholesale Distribution
Agriculture
Energy
Mining
Textiles
Heavy Industry
Relevant Teams
Trade Finance
International Banking
Legal
Compliance
Treasury
Credit Operations
Documentary Credits
Risk Management
Corporate Banking
Trade Operations
Relevant Roles
Trade Finance Manager
Documentary Credits Officer
International Banking Officer
Credit Manager
Export Finance Manager
Import Operations Manager
Trade Operations Specialist
Banking Relationship Manager
Chief Financial Officer
Treasury Manager
Compliance Officer
Trade Finance Specialist
Letter of Credit Specialist
International Trade Advisor
Banking Operations Manager
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