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Divisible Letter Of Credit for Switzerland

Divisible Letter Of Credit Template for Switzerland

A Divisible Letter of Credit under Swiss law is a specialized banking instrument that allows for partial shipments and corresponding partial payments in international trade transactions. This document, governed by Swiss federal banking regulations and international banking practices (UCP 600), provides a secure method of payment where the credit amount can be drawn down in installments. It incorporates specific Swiss legal requirements while adhering to international banking standards, making it particularly suitable for complex trading arrangements where goods are delivered and paid for in multiple stages.

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Divisible Letter Of Credit

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What is a Divisible Letter Of Credit?

The Divisible Letter of Credit is a crucial financial instrument in international trade, particularly relevant under Swiss law given Switzerland's position as a global banking and trading hub. This document type is specifically designed for transactions where goods are shipped and paid for in multiple installments, providing flexibility while maintaining security for all parties involved. It combines the stringent requirements of Swiss banking regulations with international standards such as UCP 600, making it particularly suitable for complex international trading arrangements. The document typically includes detailed provisions for partial shipments, documentary requirements, and payment terms, while incorporating specific Swiss legal requirements regarding banking operations and international trade finance.

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

1. Issuing Bank Details: Complete details of the issuing bank including name, address, SWIFT code, and reference numbers

2. Beneficiary Information: Full name and address of the beneficiary who will receive the credit

3. Applicant Information: Complete details of the applicant requesting the letter of credit

4. Credit Amount and Currency: Total value of the letter of credit and currency specification

5. Credit Type and Rules: Specification of divisible credit and applicable rules (typically UCP 600)

6. Divisibility Terms: Specific conditions and terms regarding partial shipments and drawings

7. Availability and Expiry: Where and how the credit is available, expiration date and place

8. Payment Terms: Timing and conditions of payment, including partial payment specifications

9. Required Documents: List of documents required for each drawing under the credit

10. Special Conditions: Any special terms or conditions applicable to the credit

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

1. Transferability Clause: Include when the credit needs to be transferable to other beneficiaries

2. Revolving Terms: Include when the credit has revolving characteristics

3. Red Clause: Include when advance payments are permitted under the credit

4. Back-to-Back Provisions: Include when the credit is part of a back-to-back arrangement

5. Green Clause: Include when warehouse storage provisions are required

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

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

1. Schedule A - Document Requirements: Detailed list of required documents and their specifications for each drawing

2. Schedule B - Drawing Schedule: Predetermined schedule of partial drawings if applicable

3. Schedule C - Shipping Terms: Detailed shipping requirements and schedule if applicable

4. Appendix 1 - Form of Drawing Request: Standard format for submitting drawing requests under the credit

5. Appendix 2 - Form of Transport Documents: Specified format for transport documents if required

6. Appendix 3 - Form of Commercial Invoice: Required format for commercial invoices

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

Jurisdiction

Switzerland

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions








































Clauses






























Relevant Industries

Banking & Financial Services

International Trade

Manufacturing

Commodities Trading

Import/Export

Shipping & Logistics

Agriculture

Mining

Oil & Gas

Retail

Wholesale

Construction

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Treasury

Global Transaction Banking

Risk Management

Compliance

Legal

Finance

International Trade Operations

Credit Administration

Relevant Roles

Trade Finance Manager

International Banking Officer

Documentary Credits Specialist

Treasury Manager

Import/Export Manager

Trade Operations Manager

Credit Risk Officer

Global Transaction Banking Manager

Senior Trade Finance Officer

Compliance Officer

Documentary Collections Specialist

International Trade Specialist

Banking Relationship Manager

Chief Financial Officer

Finance Director

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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