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The Letter of Credit Facility Agreement is a crucial document in Indonesian trade finance, used when a company requires regular access to letter of credit facilities for its international trade operations. This agreement is essential for businesses engaged in import/export activities who need a predetermined facility limit from a bank to issue letters of credit. Under Indonesian law, particularly Law No. 7 of 1992 as amended by Law No. 10 of 1998 on Banking, and Bank Indonesia regulations, this agreement must include specific provisions regarding foreign exchange transactions, prudential banking principles, and compliance requirements. The document establishes the framework for the ongoing relationship between the bank and the customer, including facility limits, security arrangements, operational procedures, and risk management provisions. It's particularly important in Indonesia's context where international trade plays a significant role in the economy and requires careful structuring to comply with both local regulations and international banking practices.

1. Parties: Identifies the bank providing the L/C facility and the customer/applicant, including their complete legal names, registration numbers, and addresses

2. Background: Sets out the context of the agreement, including the customer's request for the L/C facility and the bank's willingness to provide it

3. Definitions and Interpretation: Defines key terms used in the agreement and establishes rules for interpreting the document

4. Facility Details: Specifies the type, amount, and purpose of the L/C facility being provided

5. Conditions Precedent: Lists the conditions that must be satisfied before the facility becomes available

6. Utilization: Details the process and requirements for utilizing the L/C facility

7. Fees and Commissions: Specifies all fees, charges, and commissions applicable to the L/C facility

8. Security: Details the security arrangements required for the facility

9. Representations and Warranties: Sets out the representations and warranties given by the customer

10. Covenants: Lists the positive and negative undertakings of the customer

11. Events of Default: Defines circumstances constituting default and their consequences

12. Bank's Rights and Obligations: Details the rights and obligations of the bank under the facility

13. Customer's Rights and Obligations: Details the rights and obligations of the customer under the facility

14. Governing Law and Jurisdiction: Specifies Indonesian law as governing law and sets out jurisdiction for disputes

15. Miscellaneous: Contains standard boilerplate provisions including notices, amendments, and severability