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Revolving Letter Of Credit for Saudi Arabia

Revolving Letter Of Credit Template for Saudi Arabia

A Revolving Letter of Credit document under Saudi Arabian law is a specialized financial instrument that provides for the automatic reinstatement of credit after each utilization, up to a specified maximum amount. The document must comply with both international banking practices (particularly UCP 600) and Saudi Arabian regulations, including Shariah law principles. It contains detailed provisions for credit terms, documentation requirements, and revolving mechanisms, while ensuring adherence to Islamic banking principles that prohibit interest (riba) and excessive uncertainty (gharar). The document includes specific provisions for compliance with Saudi Arabian Monetary Authority (SAMA) regulations and incorporates necessary Shariah compliance certifications.

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Revolving Letter Of Credit

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What is a Revolving Letter Of Credit?

This document template is designed for situations where parties require a recurring letter of credit facility under Saudi Arabian jurisdiction. A Revolving Letter of Credit is particularly useful in ongoing trade relationships where regular shipments occur between the same parties. The document incorporates essential elements required by Saudi Arabian banking regulations, including SAMA guidelines and Shariah compliance requirements. It provides a framework for automatic or conditional reinstatement of the credit amount after each utilization, eliminating the need for issuing multiple individual letters of credit. The template includes comprehensive provisions for document presentation, payment mechanisms, and revolving terms, while ensuring compliance with Islamic banking principles. It is specifically structured to accommodate both domestic and international trade transactions, with particular attention to Saudi Arabian commercial practices and regulatory requirements.

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

1. Issuing Bank Details: Complete details of the issuing bank including name, address, and SWIFT code

2. Applicant Details: Full information about the applicant/buyer including name, address, and account details

3. Beneficiary Details: Complete information about the beneficiary/seller including name, address, and bank details

4. Credit Amount and Currency: Specification of the maximum credit amount and currency, including the revolving terms

5. Validity Period: Expiry date and place for presentation of documents

6. Revolving Terms: Specific terms of revolution including frequency, automatic/conditional reinstatement, and cumulative/non-cumulative nature

7. Payment Terms: Method of payment (sight, deferred payment, acceptance, or negotiation)

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

9. Shipment Terms: Latest shipment date, partial shipments, transhipment provisions

10. Shariah Compliance Declaration: Statement confirming compliance with Islamic banking principles

11. Governing Law and Jurisdiction: Specification of Saudi Arabian law as governing law and relevant jurisdiction

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

1. Confirmation Instructions: Used when confirmation by another bank is required, specifying the confirming bank's role

2. Transfer Provisions: Include when the credit needs to be transferable to second beneficiaries

3. Back-to-Back Arrangements: Required when allowing for back-to-back credit arrangements

4. Green Clause: Include when advance payment provisions are required

5. Special Conditions: Any additional conditions specific to the trade transaction

6. Insurance Requirements: Detailed insurance requirements when not covered in standard documentation

7. Standby Provisions: Include when the LC may convert to a standby basis

8. Force Majeure Clauses: Additional provisions for force majeure events beyond standard UCP provisions

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

1. Schedule 1: Document Presentation Requirements: Detailed checklist and format requirements for all required documents

2. Schedule 2: Fee Structure: Comprehensive breakdown of all applicable fees, charges, and commission

3. Schedule 3: Revolution Schedule: Detailed timeline and conditions for credit reinstatement

4. Schedule 4: Specimen Signatures: Authorized signatures for the applicant and any authorized representatives

5. Appendix A: Document Templates: Standard templates for commercial invoice, transport documents, and other required documentation

6. Appendix B: SAMA Compliance Checklist: Checklist ensuring compliance with Saudi Arabian Monetary Authority requirements

7. Appendix C: Shariah Compliance Certificate: Detailed certification of Shariah compliance from authorized Shariah board or advisor

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Genie AI

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions

















































Clauses









































Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Retail

Commodities Trading

Oil and Gas

Construction

Agricultural Products

Shipping and Logistics

Industrial Equipment

Relevant Teams

Legal

Trade Finance

International Banking

Compliance

Risk Management

Treasury

Corporate Banking

Trade Operations

Documentary Credits

Islamic Banking

Commercial Banking

Relevant Roles

Trade Finance Manager

International Trade Specialist

Compliance Officer

Shariah Compliance Officer

Documentary Credits Manager

Treasury Manager

Import/Export Manager

Corporate Banking Officer

Risk Management Officer

Legal Counsel

Finance Director

Commercial Banking Manager

Trade Operations Officer

Credit Analysis Manager

Senior Banking Executive

International Business Development Manager

Industries








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