The Unconditional Letter of Credit is a fundamental trade finance instrument used extensively in Pakistani international trade transactions. It provides a secure payment mechanism where a bank irrevocably commits to pay the beneficiary (typically an exporter) upon presentation of specified documents, regardless of any disputes in the underlying transaction. This document is particularly crucial in circumstances requiring absolute payment security, governed by Pakistani banking laws including the Banking Companies Ordinance, 1962, and State Bank of Pakistan regulations, while also adhering to international UCP 600 guidelines. It's commonly used in high-value international trade transactions, especially when parties seek to minimize commercial risks and ensure guaranteed payment terms.
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1. Letter of Credit Number and Date: Unique LC reference number and issuance date
2. Issuing Bank Details: Complete name, address, and SWIFT code of the issuing bank
3. Beneficiary Details: Full name and address of the party receiving payment under the LC
4. Applicant Details: Full name and address of the party requesting the LC
5. Currency and Amount: Specified currency and amount of the LC in both figures and words
6. Expiry Date and Place: Clear statement of when and where the LC expires
7. Available With/By: Specification of where and how the LC is available (payment, acceptance, negotiation)
8. Shipment Terms: Latest shipment date and any partial shipment/transhipment conditions
9. Payment Terms: Clear statement that payment is unconditional and irrevocable
10. Document Requirements: List of documents required for payment presentation
1. Advising Bank Details: Include when LC is advised through another bank
2. Confirmation Instructions: Include when confirmation is requested from another bank
3. Transfer Conditions: Include if the LC is transferable
4. Special Payment Conditions: Include for specific payment arrangements like deferred payment
5. Reimbursement Instructions: Include when separate reimbursement arrangements are needed
6. Additional Conditions: Include any special conditions or requirements specific to the transaction
1. Document Checklist: Detailed list of required documents with specific format requirements
2. Commercial Terms: Details of underlying commercial transaction (goods/services description, quantity, unit price)
3. Banking Charges Schedule: Breakdown of all applicable banking charges and who bears them
4. Shipping Schedule: Detailed shipping requirements including ports, modes of transport, and timeline if applicable
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
International Trade
Manufacturing
Import/Export
Retail
Wholesale
Agriculture
Textiles
Technology
Construction
Energy
Mining
Pharmaceuticals
Automotive
Relevant Teams
Trade Finance
International Banking
Treasury
Finance
Risk Management
Compliance
Legal
Operations
Credit
Commercial Banking
Documentary Credits
International Trade Operations
Relevant Roles
Trade Finance Manager
International Banking Officer
Import/Export Manager
Chief Financial Officer
Treasury Manager
Finance Director
Credit Manager
Banking Operations Manager
Trade Operations Officer
Documentary Credits Specialist
Compliance Officer
Risk Manager
Commercial Banking Manager
International Trade Specialist
Letter of Credit Officer
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