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Bank Guarantee Letter Of Credit Template for Saudi Arabia

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Key Requirements PROMPT example:

Bank Guarantee Letter Of Credit

"I need a Bank Guarantee Letter of Credit for a machinery import transaction from Germany to Saudi Arabia, valued at EUR 2.5 million, with payment in three installments and requiring Shariah compliance certification."

Document background
The Bank Guarantee Letter of Credit is a crucial document in international trade finance, particularly within the Saudi Arabian context where it must comply with both international banking standards and Islamic law. This document is typically used when a buyer needs to provide security to a seller in an international transaction, with a bank guaranteeing payment upon presentation of specified documents. The document must conform to Saudi Arabia's Banking Control Law, SAMA regulations, and Shariah principles, while often incorporating UCP 600 guidelines. It includes specific details about the transaction, parties involved, payment terms, and document requirements. The Bank Guarantee Letter of Credit is particularly important in Saudi Arabia's business environment, where it facilitates secure international trade while ensuring compliance with local legal and religious requirements.
Suggested Sections

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

2. Bank Details: Full details of the issuing bank including address and SWIFT code

3. Applicant Details: Complete information about the party requesting the LC

4. Beneficiary Details: Complete information about the party in whose favor the LC is issued

5. Credit Amount and Currency: Specific amount and currency of the LC

6. Type of Credit: Specification of whether irrevocable, confirmed, transferable, etc.

7. Expiry Date and Place: Clear statement of when and where the LC expires

8. Payment Terms: Specific conditions and timing of payment

9. Required Documents: Detailed list of documents required for presentation

10. Goods/Services Description: Detailed description of the underlying transaction

11. Shipment Terms: If applicable, shipping details including latest shipment date

12. Governing Law Statement: Reference to Saudi law and Shariah compliance

13. Authentication: Bank's authorized signatures and authentication details

Optional Sections

1. Confirmation Instructions: Include when confirmation from another bank is required

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

3. Revolving Credit Terms: Include for LCs that automatically renew under specified conditions

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

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

6. Partial Shipment/Drawing Terms: Include when partial shipments or drawings are allowed

7. Tolerance Clause: Include when quantity/amount variations are acceptable

Suggested Schedules

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

2. Schedule B - Payment Schedule: If applicable, breakdown of payment terms and installments

3. Schedule C - Goods Specification: Detailed technical specifications of goods/services covered

4. Appendix 1 - SAMA Compliance Declaration: Standard declaration confirming compliance with SAMA regulations

5. Appendix 2 - Shariah Compliance Certificate: Confirmation of compliance with Islamic banking principles

6. Appendix 3 - Bank's Standard Terms: Standard terms and conditions of the issuing bank for LCs

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

Relevant legal definitions



















































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Relevant Industries

Banking and Financial Services

International Trade

Manufacturing

Oil and Gas

Construction

Retail

Agriculture

Mining

Telecommunications

Pharmaceuticals

Automotive

Energy

Textiles

Technology

Industrial Equipment

Relevant Teams

Legal

Finance

Treasury

International Trade

Risk Management

Compliance

Corporate Banking

Trade Finance

Documentary Credits

Banking Operations

Relevant Roles

Trade Finance Manager

International Banking Officer

Compliance Officer

Shariah Compliance Manager

Documentary Credits Specialist

Import/Export Manager

Treasury Manager

Risk Management Officer

Corporate Banking Manager

Chief Financial Officer

Finance Director

International Trade Specialist

Banking Operations Manager

Legal Counsel

Credit Risk Officer

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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