The Issuing Bank In LC document is a crucial instrument in international trade finance within the South African context. It is used when an importer's bank provides a guarantee of payment to an exporter, subject to the presentation of specified documents that comply with the LC terms. This document type is particularly important in South Africa's trade environment, where it must align with both international banking practices (UCP 600) and local regulations, including the Banks Act 94 of 1990 and Exchange Control Regulations. The LC serves as a risk mitigation tool for international trade participants, providing security to sellers while offering buyers a means of financing their imports. It includes detailed specifications about payment terms, document requirements, timeframes, and conditions that must be met for payment to be made. The document is essential for businesses engaged in international trade, especially those dealing with significant transaction values or trading with new partners.
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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 in whose favor the LC is issued
3. Applicant Details: Complete name and address of the party requesting the LC
4. Currency and Amount: Specified currency and maximum amount available under the LC
5. Form of Credit: Whether irrevocable or irrevocable and confirmed
6. Expiry Details: Expiry date and place for presentation of documents
7. Available With/By: Specification of where and how the credit is available (payment, acceptance, negotiation)
8. Partial Shipments/Transhipment: Whether partial shipments or transhipment is allowed or prohibited
9. Loading/Dispatch/Taking in Charge: Place of taking in charge, loading, and final destination
10. Latest Date of Shipment: Final date by which shipment must be made
11. Description of Goods/Services: Brief description of the goods or services covered
12. Documents Required: Detailed list of all documents required for presentation
13. Additional Conditions: Any special conditions or terms applicable to the LC
14. Bank Charges: Specification of which party bears which bank charges
15. Presentation Period: Period after shipment within which documents must be presented
16. Confirmation Instructions: Whether confirmation is requested and by which bank
17. Governing Law and Jurisdiction: Specification of South African law and jurisdiction
1. Transferability Clause: Required only if the LC is transferable, specifying terms and conditions of transfer
2. Revolving Credit Terms: Include only for revolving LCs, specifying reinstatement terms and conditions
3. Red Clause Provisions: Include only in red clause LCs, specifying advance payment terms
4. Back-to-Back Provisions: Required only for back-to-back LC arrangements
5. Standby Specific Terms: Include only for standby LCs, specifying trigger events for drawing
6. Deferred Payment Terms: Include only when payment is to be made at a future date after document presentation
7. Green Clause Provisions: Include only in green clause LCs, specifying warehouse storage conditions
8. Document Variance Provisions: Optional section detailing acceptable variations in documents
1. Schedule A - Document Requirements: Detailed specifications for each required document
2. Schedule B - Goods Specification: Detailed description of goods/services, including technical specifications if applicable
3. Schedule C - Special Payment Terms: Detailed payment structures, particularly for complex payment arrangements
4. Schedule D - Bank's Standard LC Terms: Standard terms and conditions of the issuing bank
5. Appendix 1 - UCP 600 References: Relevant articles of UCP 600 applicable to this LC
6. Appendix 2 - SWIFT Format: SWIFT MT700 series message format for the LC
7. Appendix 3 - Compliance Checklist: Checklist ensuring compliance with South African banking regulations
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Import/Export
Retail
Commodities Trading
Agriculture
Mining
Energy
Telecommunications
Construction
Automotive
Textile
Technology
Pharmaceutical
Relevant Teams
Trade Finance
International Banking
Documentary Credits
Treasury
Import/Export
Trade Operations
Compliance
Risk Management
Foreign Exchange
Documentary Collections
Product Management
Client Relations
Credit Administration
Legal
Operations
Relevant Roles
Trade Finance Manager
International Banking Officer
Documentary Credits Specialist
Treasury Manager
Import/Export Manager
Trade Operations Officer
Compliance Officer
Credit Risk Manager
Foreign Exchange Manager
Documentary Collections Officer
Trade Finance Product Manager
Banking Relationship Manager
Senior Trade Finance Specialist
International Business Development Manager
Trade Settlement Officer
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