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Cancellation Of Letter Of Credit for United Arab Emirates

Cancellation Of Letter Of Credit Template for United Arab Emirates

A Cancellation of Letter of Credit document under UAE law is a formal banking instruction that terminates an existing letter of credit before its expiry date. The document must comply with UAE Federal Law No. 18 of 1993 (Commercial Code) and UAE Central Bank regulations, while also adhering to international banking standards including UCP 600. It contains specific details about the original letter of credit, parties involved, and reasons for cancellation, along with necessary authorizations and indemnities to protect the bank's interests. The document requires careful consideration of both local UAE banking regulations and international trade practices.

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Cancellation Of Letter Of Credit

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What is a Cancellation Of Letter Of Credit?

The Cancellation Of Letter Of Credit is a crucial document used in UAE banking and international trade when parties need to terminate a letter of credit before its natural expiry. This document becomes necessary in various situations, such as when the underlying commercial transaction is cancelled, terms cannot be met, or by mutual agreement between parties. Operating under UAE Federal Law No. 18 of 1993 and UAE Central Bank regulations, this document must include specific details about the original letter of credit, clear cancellation instructions, and appropriate authorizations. It serves as a formal record of the cancellation request and typically requires consent from all relevant parties, particularly the beneficiary, unless otherwise specified in the original letter of credit terms. The document plays a vital role in managing financial exposure and updating banking records in international trade transactions.

What sections should be included in a Cancellation Of Letter Of Credit?

1. Bank Details: Full name and address of the issuing bank

2. Letter of Credit Reference: Complete reference number and details of the Letter of Credit to be cancelled

3. Applicant Details: Full name and contact details of the original applicant of the Letter of Credit

4. Beneficiary Details: Full name and contact details of the beneficiary of the Letter of Credit

5. Cancellation Request: Clear statement requesting cancellation of the Letter of Credit

6. Reason for Cancellation: Brief explanation of why the Letter of Credit is being cancelled

7. Authorization Statement: Statement confirming the authority to request cancellation

8. Indemnity Statement: Statement indemnifying the bank against any claims arising from the cancellation

What sections are optional to include in a Cancellation Of Letter Of Credit?

1. Beneficiary's Consent: Section containing beneficiary's explicit consent to the cancellation, required when the Letter of Credit terms mandate beneficiary approval for cancellation

2. Return of Original Documents: Section requesting return of original Letter of Credit documents, needed when physical documents were issued

3. Alternative Instructions: Section specifying alternative arrangements if any replacement facilities are being put in place

4. Outstanding Presentations: Declaration regarding any outstanding presentations under the Letter of Credit, required when there might be pending transactions

What schedules should be included in a Cancellation Of Letter Of Credit?

1. Original Letter of Credit: Copy of the original Letter of Credit being cancelled

2. Beneficiary's Consent Letter: If applicable, the original signed consent letter from the beneficiary

3. Corporate Authorization: Evidence of corporate authority to cancel the Letter of Credit (board resolution, power of attorney etc.)

4. Outstanding Claims Statement: If applicable, statement showing any outstanding claims or presentations under the Letter of Credit

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




















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Relevant Industries

Banking & Financial Services

International Trade

Import/Export

Manufacturing

Retail

Construction

Energy & Resources

Agriculture

Shipping & Logistics

Commodities Trading

Relevant Teams

Finance

Treasury

Trade Operations

Legal

Compliance

Risk Management

Commercial Operations

International Trade

Banking Operations

Credit Administration

Relevant Roles

Trade Finance Manager

Treasury Manager

Financial Controller

Chief Financial Officer

Import/Export Manager

Compliance Officer

Banking Relationship Manager

Trade Operations Officer

Credit Manager

Documentary Credits Specialist

Legal Counsel

Risk Manager

Commercial Director

Supply Chain Manager

Industries





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