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The Letter of Credit Facility Agreement is a crucial document in international trade finance, particularly under Belgian law which offers a sophisticated framework for banking and financial services. This agreement is typically used when a company requires regular access to letters of credit for its business operations, especially in international trade. The document establishes a pre-approved facility under which the bank agrees to issue letters of credit up to a specified limit, saving time and effort compared to negotiating terms for each individual LC. It sets out the entire relationship between the bank and the customer, including facility limits, validity period, conditions for utilization, fees and commissions, security arrangements, and the rights and obligations of all parties. Being governed by Belgian law, it incorporates both local banking regulations and EU financial services directives, while typically also referencing international banking practices such as the UCP 600.

1. Parties: Identification of the Bank (LC issuer), the Customer (LC applicant), and any guarantors

2. Background: Context of the facility arrangement and relationship between parties

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. The Facility: Details of the LC facility, including type, amount, purpose, and duration

5. Conditions Precedent: Documents and conditions required before the facility becomes available

6. Utilization: Process and requirements for requesting LCs under the facility

7. Letters of Credit: Terms governing the issuance, amendment, and operation of LCs

8. Fees and Commissions: All charges applicable to the facility and LCs

9. Payments and Calculations: Payment mechanics, timing, and calculation methods

10. Customer Representations and Warranties: Standard declarations about the customer's status and capacity

11. Customer Undertakings: Ongoing obligations of the customer during the facility period

12. Events of Default: Circumstances constituting default and consequences

13. Changes to Parties: Rules regarding assignment and transfer of rights/obligations

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Confirmation of Belgian law application and dispute resolution