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Acceptance Lc for United Arab Emirates

Acceptance Lc Template for United Arab Emirates

An Acceptance Letter of Credit is a specialized banking instrument governed by UAE law and international banking practices (UCP 600), where a bank commits to accept time drafts drawn by the beneficiary and pay them at maturity. This document, common in UAE's international trade transactions, provides a secure payment mechanism by combining the security of a traditional LC with extended payment terms. It details the conditions for acceptance, required documentation, and payment terms while ensuring compliance with UAE Central Bank regulations and local commercial laws.

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Acceptance Lc

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What is a Acceptance Lc?

The Acceptance LC is a crucial trade finance instrument in the UAE's commercial landscape, particularly useful for transactions requiring deferred payment terms. When issuing an Acceptance LC, banks operating under UAE jurisdiction must comply with both local regulations and international standards (UCP 600). This document is typically used when sellers require bank-backed security for payment but are willing to extend credit terms to buyers. The Acceptance LC details the conditions under which the bank will accept time drafts, typically ranging from 30 to 180 days, and commits to payment at maturity. It's particularly valuable in the UAE's trading environment where it facilitates international trade by providing security to sellers while offering buyers extended payment terms.

What sections should be included in a Acceptance Lc?

1. Bank Details and Reference: Issuing bank's details, LC reference number, and date of issuance

2. Beneficiary Information: Complete name and address of the beneficiary (seller/exporter)

3. Applicant Information: Complete name and address of the applicant (buyer/importer)

4. Currency and Amount: Specified currency and amount of the Letter of Credit

5. Drafts Specification: Details of the time draft(s) to be drawn on the accepting bank

6. Acceptance Terms: Specific terms under which the bank agrees to accept the drafts and payment timeline

7. Documents Required: List of required documents for presentation (commercial invoice, transport documents, etc.)

8. Shipment Terms: Details of shipment including latest shipment date and partial shipments status

9. Presentation Period: Time period within which documents must be presented after shipment

10. Governing Law and Rules: Reference to UAE law and UCP 600 as governing frameworks

What sections are optional to include in a Acceptance Lc?

1. Transferability Clause: To be included if the LC is transferable to another beneficiary

2. Confirmation Instructions: Required if the LC needs confirmation from another bank

3. Special Instructions: Any additional terms or conditions specific to the transaction

4. Reimbursement Instructions: Include when specific reimbursement arrangements between banks need to be detailed

5. Insurance Requirements: Additional insurance requirements beyond standard coverage

What schedules should be included in a Acceptance Lc?

1. Schedule A - Document Requirements: Detailed list of required documents and their specific requirements

2. Schedule B - Goods Description: Detailed description of goods including specifications and quantities

3. Schedule C - Payment Schedule: Timeline of acceptance and payment dates if multiple drawings are involved

4. Appendix 1 - Standard Banking Forms: Standard forms required for draft presentation and acceptance

5. Appendix 2 - UCP 600 References: Relevant articles of UCP 600 applicable to this specific LC

Authors

Alex Denne

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

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions






























Clauses






















Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Retail

Wholesale

Logistics and Supply Chain

Import/Export

Commodities Trading

Industrial Equipment

Textiles and Garments

Agriculture and Food

Oil and Gas

Construction Materials

Relevant Teams

Trade Finance

International Banking

Credit Risk

Treasury

Documentary Credits

Trade Operations

Compliance

Legal

Commercial Banking

Financial Control

Relevant Roles

Trade Finance Manager

Letter of Credit Specialist

International Banking Officer

Treasury Manager

Credit Risk Officer

Trade Operations Manager

Documentary Credits Manager

Import/Export Manager

Financial Controller

Commercial Banking Manager

Trade Finance Analyst

Compliance Officer

Banking Relationship Manager

Chief Financial Officer

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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