Document background
The Advised Letter of Credit serves as a crucial financial instrument in international trade transactions governed by Saudi Arabian law and Shariah principles. It is typically used when a seller requires payment security in an international sale and the buyer's bank issues a Letter of Credit through an advising bank in the seller's country. The document contains detailed specifications of the required documents, payment terms, and conditions that must be met for payment to be made. The Advised Letter of Credit follows both international banking standards (UCP 600) and local Saudi Arabian banking regulations, ensuring compliance with Islamic banking principles. This document is particularly important in transactions where parties may not have established trading relationships or when local regulations require formal banking channels for international payments. It provides a secure payment mechanism while ensuring compliance with both international trade practices and Saudi Arabian legal requirements.
