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.
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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
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
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
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
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