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Letter Of Credit Transferable for South Africa

Letter Of Credit Transferable Template for South Africa

A Transferable Letter of Credit is a specialized financial instrument governed by South African law and international banking practices (UCP 600) that allows the first beneficiary to transfer all or part of the credit to one or more second beneficiaries. This document serves as a crucial tool in international trade financing, particularly in South Africa's cross-border transactions, providing security and payment assurance while enabling intermediate traders to participate in the transaction chain. It includes detailed specifications about the transfer conditions, documentation requirements, and payment terms, all while ensuring compliance with South African banking regulations and exchange control requirements.

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What is a Letter Of Credit Transferable?

The Letter of Credit Transferable is a vital financial instrument used in international trade transactions where intermediary traders are involved. This document type is particularly relevant in the South African context, where it must comply with both the international Uniform Customs and Practice for Documentary Credits (UCP 600) and local South African banking and exchange control regulations. It enables the first beneficiary (typically a middleman or trader) to transfer their rights under the letter of credit to one or more second beneficiaries (usually the actual suppliers of goods). The document includes crucial details about the credit amount, transfer conditions, documentation requirements, and validity periods. It's especially useful in transactions where the original beneficiary acts as an intermediary and needs to pay their supplier using the same letter of credit received from the end buyer's bank. The transferable nature of this letter of credit facilitates complex international trade transactions while maintaining the security and payment assurance that letters of credit are known for.

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

1. Issuing Bank Details: Full name, address, and reference number of the issuing bank

2. Date and Place of Issue: The date and location where the letter of credit is issued

3. Letter of Credit Number: Unique identification number for the credit

4. Beneficiary Details: Full name and address of the first beneficiary

5. Applicant Details: Full name and address of the applicant (buyer)

6. Transfer Terms: Explicit statement that the credit is transferable and conditions for transfer

7. Amount and Currency: Maximum credit amount and currency specification

8. Validity and Expiry: Validity period and expiry date of the credit

9. Documentation Requirements: List of required documents for credit utilization

10. Shipment Terms: Details of shipment including latest shipment date and partial shipments if allowed

11. Payment Terms: Specification of payment terms including sight, deferred payment, or acceptance

12. Transfer Conditions: Specific conditions under which the credit may be transferred to second beneficiaries

13. Governing Law and Jurisdiction: Reference to South African law and UCP 600

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

1. Revolving Terms: Include when the letter of credit is both transferable and revolving, specifying reinstatement conditions

2. Red Clause Provisions: Include when advance payment provisions are required

3. Green Clause Provisions: Include when storage provisions and advance payments are needed

4. Back-to-Back Arrangements: Include when the credit allows for back-to-back LC arrangements

5. Insurance Requirements: Include when specific insurance requirements need to be detailed beyond standard documentation

6. Special Instructions: Include when there are specific handling or processing instructions for the transferring bank

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

1. Schedule A - Required Documents: Detailed list of all required documents and their specifications

2. Schedule B - Fee Structure: Breakdown of all applicable fees, charges, and commission rates

3. Schedule C - Transfer Application Form: Standard form for requesting transfer of the credit

4. Appendix 1 - UCP 600 Reference: Relevant articles of UCP 600 applicable to this transferable credit

5. Appendix 2 - SWIFT Format: SWIFT message format specifications for the credit transfer

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

South Africa

Publisher

Ƶ

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions






























Clauses

























Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Commodity Trading

Shipping and Logistics

Agriculture and Produce

Wholesale Distribution

Mining and Resources

Textiles and Garments

Industrial Equipment

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Global Transaction Services

Export Operations

Import Operations

Banking Operations

Compliance

Treasury

International Trade Operations

Risk Management

Supply Chain Finance

Relevant Roles

Trade Finance Manager

International Trade Specialist

Documentary Credits Officer

Export Finance Manager

Import Finance Manager

Banking Operations Manager

Compliance Officer

Treasury Manager

Trade Operations Specialist

Letter of Credit Specialist

International Business Development Manager

Supply Chain Finance Manager

Global Transaction Banking Officer

Trade Solutions Advisor

Financial Instruments 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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