The Irrevocable Standby Letter of Credit is a fundamental financial instrument used in Australian and international commerce to provide payment security in various commercial transactions. It is typically used when one party requires a secure payment guarantee from another party's bank, particularly in high-value commercial contracts, international trade, or performance guarantee situations. The document, governed by Australian law and international banking practices, contains specific terms including the credit amount, expiry date, drawing conditions, and required documentation for payment. This type of letter of credit is 'irrevocable,' meaning once issued, it cannot be modified or cancelled without the agreement of all parties involved, providing a high level of security to the beneficiary. The instrument is commonly used in situations where the beneficiary requires assurance of payment or performance from the applicant, backed by a bank's creditworthiness.
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1. Letter Reference and Date: Unique reference number and issuance date of the letter of credit
2. Issuing Bank Details: Complete name, address, and contact information of the issuing bank
3. Beneficiary Information: Full name and address of the party in whose favor the letter of credit is issued
4. Applicant Information: Full name and address of the party requesting the letter of credit
5. Credit Amount and Currency: Specified amount and currency of the standby letter of credit
6. Expiry Date and Place: Clear statement of when and where the credit expires
7. Form of Presentation: Specified format and location for presenting documents
8. Drawing Terms and Conditions: Detailed conditions under which the credit may be drawn upon
9. Required Documents: List of documents that must be presented for drawing under the credit
10. Partial Drawings Statement: Whether partial drawings are permitted or prohibited
11. Transfer Conditions: Whether and how the credit may be transferred
12. Governing Law and Rules: Applicable law and rules (e.g., ISP98 or UCP 600)
13. Bank Authorization: Authorized signatures and authentication by the issuing bank
1. Automatic Extension Clause: Used when the letter of credit includes an evergreen clause for automatic renewal
2. Multiple Beneficiary Provisions: Required when the credit is issued in favor of multiple beneficiaries
3. Revolving Terms: Included when the credit is revolving rather than having a fixed amount
4. Special Instructions for Electronic Presentation: Required when electronic presentation of documents is permitted
5. Counter-Guarantee Provisions: Used when there is a counter-guarantee arrangement with another bank
6. Assignment of Proceeds: Included when assignment of proceeds is permitted and terms thereof
7. Confirmation Instructions: Required when the credit needs to be confirmed by another bank
1. Schedule A - Document Presentation Requirements: Detailed specifications for required documents and presentation format
2. Schedule B - Drawing Certificate Template: Standard format for beneficiary's drawing certificate
3. Schedule C - Bank Charges and Fees: Breakdown of all applicable bank charges and fees
4. Appendix 1 - Authorized Signatories: List of authorized signatories and specimen signatures
5. Appendix 2 - Form of Transfer Request: Standard format for requesting transfer of the credit
6. Appendix 3 - Form of Amendment: Template for any future amendments to the letter of credit
Authors
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Construction and Infrastructure
Manufacturing
Energy and Resources
Import/Export
Real Estate and Property Development
Telecommunications
Mining
Shipping and Logistics
Relevant Teams
Treasury
Finance
Legal
Commercial Operations
Trade Finance
Risk Management
Compliance
International Banking
Credit Administration
Corporate Banking
Relevant Roles
Treasury Manager
Chief Financial Officer
Finance Director
Trade Finance Manager
Commercial Director
Legal Counsel
Banking Relationship Manager
Credit Manager
Risk Manager
International Trade Specialist
Corporate Banking Officer
Financial Controller
Compliance Officer
Documentary Credits Specialist
Project Finance Manager
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