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The LC Confirming Bank agreement is a crucial document in international trade finance, particularly relevant in the Philippine context where cross-border transactions require additional security. This agreement is used when a bank (the confirming bank) adds its confirmation to a letter of credit issued by another bank, thereby providing an additional undertaking to pay the beneficiary. The document becomes necessary when the beneficiary seeks additional assurance of payment, typically due to concerns about the issuing bank's country risk or credit standing. It includes detailed provisions on the scope of confirmation, document examination procedures, payment terms, and risk allocation, all structured to comply with Philippine banking regulations and international banking practices. The agreement is particularly important in emerging market transactions where local banks' letters of credit may require confirmation from international banks to be commercially acceptable.

1. Parties: Identifies all parties to the agreement including the confirming bank, issuing bank, and beneficiary

2. Background: Contextual information about the underlying LC transaction and the purpose of confirmation

3. Definitions: Defines key terms used throughout the agreement, including banking, LC, and UCP 600 terminology

4. Scope of Confirmation: Details the extent and nature of the confirmation commitment

5. Terms and Conditions of Confirmation: Specifies the conditions under which the confirmation is provided and maintained

6. Fees and Charges: Outlines all fees, charges, and commission related to the confirmation service

7. Payment Terms: Details the payment mechanics, timeline, and procedures

8. Document Examination: Procedures for examining documents presented under the LC

9. Rights and Obligations: Defines the rights and obligations of each party under the confirmation arrangement

10. Representations and Warranties: Standard banking and corporate representations and warranties

11. Events of Default: Lists circumstances constituting default and corresponding remedies

12. Governing Law and Jurisdiction: Specifies Philippine law as governing law and defines jurisdiction for disputes