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Negotiable Lc for Malaysia

Negotiable Lc Template for Malaysia

A Negotiable Letter of Credit document under Malaysian law is a formal banking instrument that provides a secure method of payment in international trade transactions. Governed by Malaysian financial regulations, particularly the Financial Services Act 2013 and the Bills of Exchange Act 1949, this document represents a bank's irrevocable commitment to pay the beneficiary upon presentation of compliant documents. It incorporates international banking practices through UCP 600 while maintaining compliance with Malaysian legal requirements and Bank Negara Malaysia's guidelines.

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Negotiable Lc

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What is a Negotiable Lc?

The Negotiable LC is a crucial document in international trade finance, providing security and payment assurance to parties involved in cross-border transactions. Used primarily when parties seek a secure payment method with the ability to negotiate or transfer the payment obligation, this document type is particularly relevant in Malaysian trade contexts where it must comply with local banking regulations and Bank Negara Malaysia's requirements. The document enables the beneficiary to receive payment against compliant documents or negotiate the instrument with their bank, making it especially valuable in complex international trade transactions. The structure incorporates both Malaysian legal requirements and international banking practices, particularly UCP 600 guidelines, ensuring its effectiveness in facilitating global trade while maintaining local legal compliance.

What sections should be included in a Negotiable Lc?

1. Issuing Bank Details: Complete identification and contact information of the issuing bank

2. Letter of Credit Number: Unique identification number assigned to the LC

3. Date of Issue: Date when the LC is issued

4. Applicant Details: Complete name and address of the party requesting the LC (typically the buyer)

5. Beneficiary Details: Complete name and address of the party in whose favor the LC is issued (typically the seller)

6. Currency and Amount: Specified currency and amount of the LC in both figures and words

7. Expiry Date: Date and place of expiry of the LC

8. Available With/By: Specifies where and how the LC is available (payment, acceptance, or negotiation)

9. Partial Shipments: Whether partial shipments are allowed or prohibited

10. Transhipment: Whether transhipment is allowed or prohibited

11. Documents Required: Detailed list of all required documents for LC negotiation

12. Goods Description: Brief description of goods/services covered by the LC

13. Incoterms: Specified shipping terms and conditions

14. Payment Terms: Specific conditions and timeline for payment

15. Presentation Period: Timeframe within which documents must be presented after shipment

What sections are optional to include in a Negotiable Lc?

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

2. Red Clause: Include when advance payment to the beneficiary is permitted

3. Green Clause: Include when storage of goods is involved with advance payment

4. Revolving Credit Clause: Include when the LC is to be automatically renewed under specified conditions

5. Back-to-Back Provisions: Include when the LC may be used as collateral for another LC

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

7. Special Conditions: Include any additional terms specific to the transaction

8. Insurance Requirements: Include when specific insurance coverage is required beyond standard terms

What schedules should be included in a Negotiable Lc?

1. Schedule A - Document Requirements: Detailed checklist of required documents and their specifications

2. Schedule B - Shipping Terms: Detailed shipping instructions and requirements

3. Schedule C - Goods Specification: Detailed technical specifications of goods covered by the LC

4. Appendix 1 - Bank Forms: Standard forms required by the issuing bank

5. Appendix 2 - UCP 600 References: Relevant articles of UCP 600 applicable to this LC

6. Appendix 3 - Fee Schedule: Breakdown of all applicable banking charges and fees

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

Malaysia

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions








































Clauses






























Relevant Industries

International Trade

Banking and Finance

Manufacturing

Import/Export

Retail

Commodities

Agriculture

Technology

Automotive

Construction

Energy

Textiles

Mining

Chemical Industry

Relevant Teams

Trade Finance

International Banking

Treasury

Legal

Compliance

Risk Management

Operations

Finance

Procurement

Supply Chain

Documentary Credits

International Business

Relevant Roles

Trade Finance Manager

International Trade Specialist

Finance Director

Treasury Manager

Credit Manager

Import/Export Manager

Trade Operations Officer

Documentary Credits Specialist

Compliance Officer

Risk Manager

Banking Relationship Manager

Chief Financial Officer

Supply Chain Manager

Procurement 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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