Letter Of Credit Agreement Template for Pakistan

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Key Requirements PROMPT example:

Letter Of Credit Agreement

"I need a Letter of Credit Agreement for our textile manufacturing company based in Karachi, establishing a USD 2 million LC facility with United Bank Limited for importing cotton from Egypt, with the facility to commence from March 1, 2025."

Document background
The Letter of Credit Agreement is a crucial document in international trade finance within the Pakistani jurisdiction. It is used when a business needs to establish a letter of credit facility with a bank to facilitate international trade transactions. The agreement outlines the relationship between the bank and the applicant, setting forth terms for issuing letters of credit, including facility limits, collateral requirements, fees, and compliance obligations. It incorporates requirements from Pakistani banking laws, State Bank of Pakistan regulations, and international banking practices (UCP 600). This document is essential for businesses engaged in import/export activities, providing security and payment assurance for international trade transactions while ensuring compliance with local and international banking standards.
Suggested Sections

1. Parties: Identifies the bank issuing the letter of credit, the applicant (buyer), and any other relevant parties

2. Background: Explains the context of the agreement and the parties' intention to establish a letter of credit facility

3. Definitions: Defines key terms used throughout the agreement

4. Letter of Credit Facility: Details the type, amount, and nature of the LC facility being provided

5. Conditions Precedent: Lists conditions that must be satisfied before the LC facility becomes available

6. Application and Issuance Procedure: Outlines the process for applying for and issuing letters of credit under the facility

7. Fees and Charges: Specifies all fees, commissions, and charges applicable to the LC facility

8. Security and Margin Requirements: Details the security arrangements and margin requirements for the LC facility

9. Representations and Warranties: States the legal assurances provided by the applicant

10. Covenants: Lists ongoing obligations of the applicant during the term of the agreement

11. Events of Default: Specifies circumstances that constitute default and their consequences

12. Term and Termination: States the duration of the agreement and conditions for termination

13. Governing Law and Jurisdiction: Specifies Pakistani law as governing law and defines jurisdiction for disputes

Optional Sections

1. Multilateral LC Provisions: Additional provisions for LCs involving multiple banks or correspondents

2. Foreign Currency Provisions: Special terms for LCs issued in foreign currencies

3. Revolving LC Terms: Specific provisions for revolving letter of credit facilities

4. Back-to-Back LC Arrangements: Terms for back-to-back LC arrangements, if applicable

5. Electronic Presentation: Terms for electronic presentation of documents under the LC

6. Force Majeure: Provisions dealing with unforeseen circumstances affecting LC operations

7. Assignment Provisions: Terms governing the assignment of rights under the LC agreement

Suggested Schedules

1. Schedule 1 - LC Application Form: Standard form for applying for individual LCs under the facility

2. Schedule 2 - Fee Schedule: Detailed breakdown of all applicable fees and charges

3. Schedule 3 - Security Documents: List and copies of required security documents

4. Schedule 4 - Authorized Signatories: List of persons authorized to act on behalf of the applicant

5. Schedule 5 - Standard LC Formats: Approved formats for different types of LCs

6. Appendix A - Documentary Requirements: List of required documents for different types of LCs

7. Appendix B - Compliance Certificates: Templates for periodic compliance certifications

8. Appendix C - Bank's Standard Terms: Bank's standard terms and conditions for LC operations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Retail

Wholesale

Commodities Trading

Agriculture

Textiles

Energy

Construction

Pharmaceuticals

Relevant Teams

Legal

Finance

Treasury

International Trade

Compliance

Risk Management

Corporate Banking

Trade Operations

Credit Administration

Documentary Credits

Relevant Roles

Trade Finance Manager

Import/Export Manager

Chief Financial Officer

Treasury Manager

Finance Director

Banking Relationship Manager

Credit Manager

International Trade Specialist

Compliance Officer

Legal Counsel

Risk Manager

Corporate Banking Officer

Documentary Credits Specialist

Financial Controller

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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