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Lc Without Recourse for United Arab Emirates

Lc Without Recourse Template for United Arab Emirates

A Letter of Credit Without Recourse is a financial instrument governed by UAE law, specifically UAE Federal Law No. 18 of 1993 and UAE Central Bank regulations, that provides a secure method of payment in international trade. This document represents an irrevocable undertaking by a bank to pay the beneficiary a specified amount, provided that all required documents are presented in compliance with the LC terms. The 'without recourse' feature means that once the documents are accepted, the beneficiary is released from any liability regarding the validity or authenticity of the documents, transferring this risk to the issuing bank or buyer.

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Lc Without Recourse

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What is a Lc Without Recourse?

The Letter of Credit (LC) Without Recourse is a crucial trade finance instrument commonly used in the United Arab Emirates for securing international trade transactions. This document type is particularly important in the UAE's business environment, where it facilitates trade between importers and exporters while providing security to all parties involved. The LC Without Recourse structure specifically protects the beneficiary (typically the seller) from future claims regarding document authenticity or validity, making it particularly attractive for exporters. Operating under UAE Federal Law No. 18 of 1993 and UAE Central Bank regulations, while also adhering to international banking practices (UCP 600), this document provides a robust framework for international trade payments. It is typically used when the parties seek a clean transfer of risk to the issuing bank and/or buyer, offering the beneficiary enhanced protection compared to standard LCs.

What sections should be included in a Lc Without Recourse?

1. LC Number and Date: Unique identifier for the LC and issuance date

2. Issuing Bank Details: Complete name and contact information of the issuing bank

3. Beneficiary Details: Full name and address of the beneficiary (seller/exporter)

4. Applicant Details: Full name and address of the applicant (buyer/importer)

5. Amount and Currency: LC value and currency, including words and figures

6. Non-Recourse Declaration: Clear statement of the non-recourse nature of the LC

7. Expiry Date and Place: Validity period and location for document presentation

8. Documentation Requirements: Specific list of required documents for LC negotiation

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

10. Payment Terms: Specification of when and how payment will be made

11. Governing Law and Jurisdiction: Statement of UAE law governance and jurisdiction

What sections are optional to include in a Lc Without Recourse?

1. Transferability Clause: Include when the LC needs to be transferable to a second beneficiary

2. Red Clause: Include when advance payment provisions are required

3. Revolving Terms: Include for recurring trade relationships with multiple drawings

4. Confirmation Instructions: Include when confirmation by another bank is required

5. Special Conditions: Include for any transaction-specific requirements or conditions

6. Swift Conditions: Include when specific SWIFT messaging requirements apply

What schedules should be included in a Lc Without Recourse?

1. Commercial Invoice Format: Prescribed format for commercial invoice presentation

2. Transport Document Requirements: Detailed specifications for bills of lading or airway bills

3. Insurance Document Requirements: Specifications for required insurance documentation

4. Certificate of Origin Requirements: Format and requirements for origin certification

5. Bank Fee Schedule: Detailed breakdown of applicable banking charges and fees

6. Document Presentation Checklist: Comprehensive list of required documents and their specifications

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

Commodities Trading

Oil and Gas

Textiles

Electronics

Agricultural Products

Construction Materials

Automotive

Chemical Industry

Consumer Goods

Relevant Teams

Trade Finance

International Banking

Corporate Banking

Documentary Credits

Risk Management

Compliance

Treasury

Finance

Legal

Operations

Supply Chain

Relevant Roles

Trade Finance Manager

International Banking Officer

Credit Manager

Documentary Credits Specialist

Export Finance Manager

Import Finance Manager

Trade Operations Manager

Relationship Manager - Corporate Banking

Treasury Manager

Risk Management Officer

Compliance Officer

Chief Financial Officer

Finance Director

International Trade Specialist

Supply Chain Manager

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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