Commercial Letter of Credit (Documentary)

IRREVOCABLE DOCUMENTARY LETTER OF CREDIT

IRREVOCABLE DOCUMENTARY LETTER OF CREDIT

Letter of Credit Number: [L/C NUMBER]

Date of Issue: [DATE]

Date and Place of Expiry: [EXPIRATION DATE] at [PLACE - typically Beneficiary's country or Confirming Bank's counters]

Applicant Reference: [APPLICANT'S REFERENCE NUMBER]

PARTIES

ISSUING BANK:
[ISSUING BANK LEGAL NAME]
[ADDRESS]
[CITY, STATE/COUNTRY, ZIP]
SWIFT/BIC: [SWIFT CODE]
(hereinafter "Issuing Bank")

ADVISING BANK (if any):
[ADVISING BANK LEGAL NAME]
[ADDRESS]
[CITY, STATE/COUNTRY, ZIP]
SWIFT/BIC: [SWIFT CODE]
(hereinafter "Advising Bank")

CONFIRMING BANK (if confirmed):
☐ Advising Bank is requested to add its confirmation
☐ No confirmation requested
[CONFIRMING BANK NAME IF DIFFERENT FROM ADVISING BANK]

APPLICANT (Buyer/Importer):
[APPLICANT LEGAL NAME]
[ADDRESS]
[CITY, STATE/COUNTRY, ZIP]
(hereinafter "Applicant")

BENEFICIARY (Seller/Exporter):
[BENEFICIARY LEGAL NAME]
[ADDRESS]
[CITY, STATE/COUNTRY, ZIP]
(hereinafter "Beneficiary")

LETTER OF CREDIT TERMS

1. CURRENCY AND AMOUNT

Currency Code and Amount: [CURRENCY CODE, e.g., USD] [AMOUNT IN FIGURES]

Amount in Words: [AMOUNT IN WORDS] [CURRENCY NAME]

☐ Tolerance: Plus or minus [5%/10%/___%] of the credit amount
☐ About/Approximately: The word "about" allows a tolerance of +/- 10%
☐ Maximum Amount: Not exceeding [CURRENCY] [AMOUNT]

2. AVAILABILITY

This Letter of Credit is available with:

Available With: ☐ Issuing Bank ☐ Advising Bank ☐ Confirming Bank ☐ Any Bank

By:
☐ Sight Payment - Payment at sight against presentation of complying documents
☐ Deferred Payment - Payment [___] days after [sight/B/L date/shipment date]
☐ Acceptance - Acceptance of draft(s) drawn at [___] days [sight/B/L date]
☐ Negotiation - Negotiation of Beneficiary's draft(s) at sight on [DRAWEE BANK]

3. DRAFTS/BILLS OF EXCHANGE

Drafts, if required, shall be:

• Drawn on: [DRAWEE BANK NAME AND ADDRESS]
• At: [sight / ___ days sight / ___ days from B/L date]
• For: [100% / ___%] of invoice value
• Marked: "Drawn under [ISSUING BANK] Letter of Credit No. [L/C NUMBER] dated [DATE]"

4. PARTIAL SHIPMENTS

☐ Partial shipments are ALLOWED
☐ Partial shipments are NOT ALLOWED

5. TRANSSHIPMENT

☐ Transshipment is ALLOWED
☐ Transshipment is NOT ALLOWED

6. SHIPMENT/DISPATCH DETAILS

Shipment From: [PORT/PLACE OF LOADING]

Shipment To: [PORT/PLACE OF DISCHARGE]

Final Destination: [FINAL DESTINATION, if different]

Latest Date of Shipment: [DATE]

Shipment Period: [e.g., "During January 2024" or "Not later than February 15, 2024"]

Mode of Transport:
☐ Sea/Ocean ☐ Air ☐ Road ☐ Rail ☐ Multimodal ☐ Courier

REQUIRED DOCUMENTS

Documents must be presented within [21] days after the date of shipment but within the validity of this Letter of Credit.

7. DOCUMENTS REQUIRED FOR PAYMENT

Beneficiary must present the following documents:

(a) COMMERCIAL INVOICE:
☐ Signed commercial invoice in [___] original(s) and [___] copies
☐ Covering: [DESCRIPTION OF GOODS]
☐ Showing: [Applicant's name and address / Contract or P.O. number / Price terms]
☐ Amount: [Must not exceed L/C amount / Must correspond to L/C amount]

(b) TRANSPORT DOCUMENT:

☐ Bill of Lading (B/L):

• Full set of [3/3] original clean on board ocean bills of lading
• Made out to order of [Issuing Bank / Applicant / Blank endorsed]
• Marked "Freight [Prepaid / Collect]"
• Notify: [NOTIFY PARTY NAME AND ADDRESS]
• Showing: [Shipping marks / Container number]

☐ Air Waybill (AWB):

• Original air waybill marked "Freight [Prepaid / Collect]"
• Consigned to: [CONSIGNEE]
• Notify: [NOTIFY PARTY]

☐ Multimodal Transport Document:

• Original multimodal transport document
• Evidencing dispatch/taking in charge from [PLACE] to [PLACE]

☐ Road/Rail Transport Document:

• Original [CMR/CIM] consignment note
• Consigned to: [CONSIGNEE]

(c) INSURANCE DOCUMENT:

☐ Required - Insurance policy or certificate in negotiable form for [110%/___%] of invoice value, covering:

• Risks: [All Risks / Institute Cargo Clauses (A) / ICC (A)(B)(C)]
• Additional coverage: [War, SRCC, etc.]
• Claims payable in: [CURRENCY] at [PLACE]
• Blank endorsed or endorsed to order of [PARTY]

☐ Not Required - Insurance arranged by Applicant

(d) PACKING LIST:
☐ Packing list in [___] original(s) and [___] copies showing:

• Net and gross weights
• Dimensions
• Number of packages
• Contents of each package

(e) CERTIFICATE OF ORIGIN:
☐ Certificate of origin issued by [Chamber of Commerce / Manufacturer / Beneficiary]
☐ [GSP Form A / EUR.1 / Other: ___________]
☐ Stating goods are of [COUNTRY] origin

(f) INSPECTION CERTIFICATE:
☐ Pre-shipment inspection certificate issued by [INSPECTION COMPANY NAME]
☐ Stating goods conform to [CONTRACT SPECIFICATIONS / STANDARDS]

(g) WEIGHT/MEASUREMENT CERTIFICATE:
☐ Weight/measurement certificate issued by [ISSUER]

(h) BENEFICIARY'S CERTIFICATE:
☐ Beneficiary's signed certificate stating: [REQUIRED STATEMENT]

(i) ADDITIONAL DOCUMENTS:
☐ [SPECIFY ANY OTHER REQUIRED DOCUMENTS]
________________________________
________________________________

GOODS DESCRIPTION

8. DESCRIPTION OF GOODS/SERVICES

[DETAILED DESCRIPTION OF GOODS - Must match commercial invoice exactly]

Quantity: [QUANTITY AND UNIT]

Unit Price: [CURRENCY] [AMOUNT] per [UNIT] [Price Term - FOB/CIF/CFR/etc.]

Total Amount: [CURRENCY] [AMOUNT]

INCOTERMS 2020: [FOB / CIF / CFR / EXW / DDP / FCA / etc.] [NAMED PLACE]

Contract/P.O. Reference: [CONTRACT OR PURCHASE ORDER NUMBER]

SPECIAL CONDITIONS

9. ADDITIONAL CONDITIONS

☐ Third-party documents are [acceptable / not acceptable]
☐ Documents dated prior to L/C issuance are [acceptable / not acceptable]
☐ Stale documents are [acceptable if presented within ___ days / not acceptable]
☐ [OTHER SPECIAL CONDITIONS]:
________________________________
________________________________

10. CHARGES

All bank charges outside [ISSUING COUNTRY] are for account of: ☐ Beneficiary ☐ Applicant

Confirmation charges (if any) are for account of: ☐ Beneficiary ☐ Applicant

Discrepancy fee of [USD $___] shall be deducted from any drawing with discrepancies, if waived

GOVERNING RULES AND LAW

11. APPLICABLE RULES

This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No. 600 ("UCP 600").

☐ This Letter of Credit is also subject to the eUCP Version 2.0 (Supplement to UCP 600 for Electronic Presentation)

☐ This Letter of Credit is also subject to the International Standard Banking Practice (ISBP 745)

Except to the extent inconsistent with the above rules, this Letter of Credit is also governed by the laws of [GOVERNING LAW STATE/COUNTRY].

12. PRESENTATION

(a) Place for Presentation:
Documents must be presented to:
[BANK NAME]
[ADDRESS]
[ATTENTION]

(b) Method:
☐ Documents must be presented by courier
☐ Documents may be presented [in person / by mail / electronically if eUCP applies]

(c) Examination Period:
The nominated/issuing bank shall have a maximum of [5] banking days following the day of presentation to examine documents and determine whether to honor or refuse (UCP 600 Article 14(b)).

13. AMENDMENTS

This Letter of Credit may be amended only with the consent of the Issuing Bank, Confirming Bank (if any), and Beneficiary. Partial acceptance of amendments is not permitted.

14. TRANSFERABILITY

☐ This Letter of Credit is TRANSFERABLE in accordance with UCP 600 Article 38

☐ This Letter of Credit is NOT TRANSFERABLE

ISSUING BANK'S UNDERTAKING

We hereby issue this Irrevocable Documentary Letter of Credit and undertake to honor presentations that comply with the terms and conditions of this Letter of Credit.

The Issuing Bank's obligation is independent of and unaffected by any underlying sales contract or other arrangement between Applicant and Beneficiary.

AUTHORIZED SIGNATURE

[ISSUING BANK LEGAL NAME]

By: _____________________________________
Name: ___________________________________
Title: Authorized Signatory
Date: ____________________________________

By: _____________________________________
Name: ___________________________________
Title: Authorized Signatory
Date: ____________________________________

[Bank Seal/Stamp]

SWIFT/Telex Reference: [REFERENCE NUMBER]

ADVICE BY ADVISING BANK (if applicable)

This Letter of Credit is advised without engagement on our part. We have verified the authenticity of this Letter of Credit.

☐ We add our confirmation to this Letter of Credit in accordance with UCP 600 Article 8.

[ADVISING/CONFIRMING BANK NAME]

By: _____________________________________
Name: ___________________________________
Title: Authorized Signatory
Date: ____________________________________

KEY UCP 600 PROVISIONS

Article 2 - Definitions

"Complying presentation" means a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of UCP 600, and international standard banking practice.

Article 5 - Documents v. Goods/Services/Performance

Banks deal with documents and not with goods, services, or performance to which the documents may relate.

Article 14 - Standard for Examination of Documents

A nominated bank, confirming bank (if any), and the issuing bank must examine a presentation to determine, on the basis of the documents alone, whether or not the documents appear on their face to constitute a complying presentation.

Article 16 - Discrepant Documents, Waiver and Notice

When documents presented do not comply, the bank must give a single notice of refusal stating all discrepancies within [5] banking days.

Article 30 - Tolerance in Credit Amount, Quantity and Unit Prices

The words "about" or "approximately" allow a tolerance not to exceed 10% of the amount, quantity, or unit price.

DOCUMENT CHECKLIST FOR BENEFICIARY

☐ All documents prepared within [21] days of shipment date
☐ Description of goods matches L/C exactly
☐ Document titles match L/C requirements
☐ All required signatures present
☐ Amounts consistent across all documents
☐ Shipping dates within L/C period
☐ No discrepancies between documents
☐ Correct number of originals and copies
☐ All special conditions satisfied
☐ Insurance coverage amount correct (if required)
☐ Certificate of origin properly issued
☐ Bill of lading properly endorsed

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