A Direct Letter of Credit serves as a fundamental instrument in international trade finance, particularly within the Pakistani banking and regulatory framework. This document is typically used when an importer (buyer) in Pakistan needs to provide payment security to an overseas exporter (seller), with the backing of a Pakistani bank. The Direct Letter of Credit includes specific terms regarding payment conditions, document requirements, and compliance with both Pakistani banking regulations and international standards (UCP 600). It's particularly relevant when dealing with new trading relationships or when required by regulatory authorities for certain types of imports. The document must conform to State Bank of Pakistan guidelines, Foreign Exchange Regulation Act requirements, and international banking practices, making it a crucial tool for facilitating secure international trade transactions.
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1. Letter Reference and Date: Unique LC reference number and issuance date
2. Beneficiary Details: Complete name and address of the party receiving payment
3. Applicant Details: Complete name and address of the party requesting the LC
4. Issuing Bank Details: Name and address of the bank issuing the LC
5. Credit Amount and Currency: Specified amount and currency of the LC
6. Form of Credit: Specification that this is an irrevocable direct letter of credit
7. Expiry Date and Place: Validity period and location where LC expires
8. Payment Terms: Specification of payment timing (at sight, deferred, etc.)
9. Shipment Terms: Latest shipment date and delivery conditions
10. Document Requirements: List of required documents for LC settlement
11. Goods Description: Detailed description of goods/services covered by the LC
12. Special Conditions: Any specific terms or conditions applicable to this LC
13. Governing Law: Statement that the LC is governed by Pakistani law and UCP 600
1. Advising Bank Details: Details of the intermediary bank, if any, used to advise the LC to the beneficiary
2. Transferability Clause: Include when the LC needs to be transferable to another beneficiary
3. Confirmation Instructions: Include when confirmation from another bank is required
4. Partial Shipment/Drawing: Include when specifying whether partial shipments or drawings are allowed
5. Transhipment Terms: Include when specific transhipment restrictions or allowances apply
6. Red Clause Provisions: Include when advance payment facilities are to be provided to the beneficiary
7. Insurance Requirements: Include when specific insurance requirements need to be detailed
1. Commercial Invoice Template: Prescribed format for the commercial invoice
2. Transport Document Requirements: Detailed specifications for bills of lading or other transport documents
3. Product Specifications: Detailed technical specifications of goods
4. Inspection Certificate Requirements: Format and requirements for inspection certificates
5. Bank Draft Format: Template for drafts to be drawn under the LC
6. Required Certifications: List and formats of required certificates (origin, quality, etc.)
7. Amendment Format: Standard format for any future amendments to the LC
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Import/Export
Retail
Agriculture
Textiles
Pharmaceuticals
Energy
Mining
Technology
Automotive
Construction
Shipping and Logistics
Relevant Teams
Trade Finance
International Banking
Corporate Banking
Treasury
Risk Management
Compliance
Legal
Operations
Documentary Credits
Trade Operations
Corporate Finance
Procurement
Supply Chain
International Trade
Relevant Roles
Trade Finance Manager
Import/Export Manager
Chief Financial Officer
Treasury Manager
Banking Relationship Manager
Credit Manager
Trade Operations Officer
Compliance Officer
Documentary Credits Specialist
Financial Controller
Supply Chain Manager
Procurement Manager
International Trade Specialist
Risk Manager
Letter of Credit Officer
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