A Transit Letter of Credit is a crucial financial instrument in international trade, particularly relevant in the UAE's position as a global trading hub. This document is essential when goods are shipped through intermediate destinations before reaching their final destination, providing financial security and documentation requirements for all parties involved. The Transit Letter of Credit, governed by UAE law and international banking practices, is commonly used in free zone operations and re-export activities. It includes specific provisions for transit documentation, customs requirements, and multiple handling points, while ensuring compliance with UAE Central Bank regulations and international trade practices. This document is particularly important for businesses utilizing the UAE's strategic location for international trade and taking advantage of its sophisticated banking and logistics infrastructure.
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1. Letter Reference and Date: Unique LC reference number, date of issuance, and expiry date
2. Bank Details: Full details of the issuing bank, including branch and contact information
3. Applicant Details: Complete information about the party requesting the LC (usually the buyer/importer)
4. Beneficiary Details: Complete information about the party in whose favor the LC is issued (usually the seller/exporter)
5. Amount and Currency: The credit amount and currency, including whether partial shipments are allowed
6. Transaction Details: Description of the underlying trade transaction, including goods description and trade terms
7. Transit Requirements: Specific details about transit routing, intermediate destinations, and related requirements
8. Document Requirements: List of required documents (transport documents, commercial invoice, certificates, etc.)
9. Shipping Terms: Details of shipment, latest shipment date, and transportation requirements
10. Payment Terms: Conditions for payment, including time of payment and payment method
11. Governing Law: Reference to UAE law and UCP 600 as governing frameworks
1. Transferability Clause: Include when the LC needs to be transferable to another beneficiary
2. Back-to-Back Provisions: Include when the LC may be used as collateral for another LC
3. Red Clause Provisions: Include when advance payment facilities are required
4. Green Clause Provisions: Include when storage facilities at destination are required
5. Insurance Requirements: Include when specific insurance requirements need to be detailed
6. Special Customs Requirements: Include when specific customs documentation or procedures are required for transit
7. Free Zone Requirements: Include when goods will transit through UAE free zones
1. Schedule A - Document Checklist: Detailed checklist of all required documents and their specifications
2. Schedule B - Transit Route Details: Detailed description of the transit route, ports, and transportation modes
3. Schedule C - Goods Specification: Detailed specification of goods including quantity, quality, and packaging requirements
4. Appendix 1 - Bank Forms: Standard forms required by the issuing bank
5. Appendix 2 - Customs Forms: Required customs documentation for transit goods
6. Appendix 3 - Transport Documents: Templates or requirements for transport documentation
Relevant legal definitions
Clauses
Relevant Industries
International Trade
Banking and Financial Services
Logistics and Transportation
Manufacturing
Import/Export
Wholesale Trading
Retail
Commodities Trading
Free Zone Operations
Maritime Services
Aviation Services
Warehouse and Storage
Relevant Teams
Legal
Finance
Treasury
International Trade
Supply Chain
Logistics
Banking Operations
Compliance
Risk Management
Commercial Operations
Documentary Credits
Trade Finance
Relevant Roles
Trade Finance Manager
Import/Export Manager
Treasury Manager
Financial Controller
Supply Chain Manager
Logistics Manager
Banking Operations Manager
Trade Compliance Officer
Documentary Credits Specialist
Chief Financial Officer
International Trade Specialist
Customs Relations Manager
Free Zone Operations Manager
Risk Management Officer
Legal Counsel
Commercial Director
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