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Trade Finance Agreement for Nigeria

Trade Finance Agreement Template for Nigeria

A comprehensive legal agreement governed by Nigerian law that establishes the terms and conditions for trade finance facilities between financial institutions and trading entities. The document incorporates key requirements under Nigerian banking regulations, including the Banks and Other Financial Institutions Act (BOFIA) 2020 and Central Bank of Nigeria guidelines. It covers facility terms, security arrangements, utilization mechanics, compliance requirements, and risk management provisions specific to trade finance transactions in the Nigerian context, while ensuring alignment with international trade finance practices.

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Trade Finance Agreement

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What is a Trade Finance Agreement?

The Trade Finance Agreement serves as the primary legal framework for trade finance facilities in Nigeria, enabling businesses to access financing for their international and domestic trade operations. This document is essential when establishing structured trade finance arrangements between financial institutions and trading entities, providing comprehensive coverage of facility terms, security arrangements, and operational procedures. It is designed to comply with Nigerian banking regulations, including BOFIA 2020 and Central Bank of Nigeria directives, while incorporating international best practices in trade finance. The agreement is particularly crucial for businesses engaged in import/export activities, requiring documentary credits, supply chain finance, or other trade finance instruments. It includes specific provisions for Nigerian foreign exchange regulations and cross-border transaction requirements.

What sections should be included in a Trade Finance Agreement?

1. Parties: Identification of the finance provider(s), borrower(s), and any guarantors

2. Background: Context of the trade finance facility and purpose of the agreement

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

4. The Facility: Details of the trade finance facility including type, amount, purpose, and availability period

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

6. Utilization: Process and requirements for drawing down the facility

7. Interest and Fees: Interest calculation, payment terms, and applicable fees

8. Payment Mechanics: Payment procedures, currency provisions, and payment hierarchies

9. Security and Collateral: Security arrangements and collateral requirements

10. Representations and Warranties: Standard representations and warranties by the borrower

11. Covenants: Positive and negative undertakings by the borrower

12. Events of Default: Circumstances constituting default and consequences

13. Changes to Parties: Assignment and transfer provisions

14. Administration: Administrative aspects including notices and calculations

15. Governing Law and Enforcement: Choice of Nigerian law and enforcement provisions

What sections are optional to include in a Trade Finance Agreement?

1. Syndication Provisions: Required if multiple lenders are involved or syndication is contemplated

2. Islamic Finance Compliance: Required if the facility needs to be Sharia-compliant

3. Export Credit Agency Support: Include when ECA backing is part of the structure

4. Currency Risk Management: Required for cross-border transactions with significant currency exposure

5. Tax Gross-Up and Indemnities: Detailed tax provisions for complex cross-border transactions

6. Bank Guarantees: Required if bank guarantees form part of the facility

7. Documentary Credits: Required for facilities involving letters of credit

8. Supply Chain Finance Provisions: Include for supply chain finance structures

9. Insurance Requirements: Detailed insurance provisions for specific types of trade finance

What schedules should be included in a Trade Finance Agreement?

1. Conditions Precedent Documents: List of required documents and conditions

2. Form of Utilization Request: Standard form for drawing down the facility

3. Calculation of Interest and Fees: Detailed methodology for calculations

4. Form of Transfer Certificate: Standard form for transfers between lenders

5. Security Documents: Forms of security documents and perfection requirements

6. Authorized Signatories: List of authorized signatories and specimen signatures

7. Eligible Trade Transactions: Criteria and types of eligible trade transactions

8. Form of Compliance Certificate: Template for periodic compliance certification

9. Processing Requirements: Operational procedures and requirements

10. Reporting Requirements: Templates and timing for required reports

Authors

Alex Denne

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

Jurisdiction

Nigeria

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions






















































































Clauses















































Relevant Industries

Banking and Financial Services

International Trade

Import/Export

Manufacturing

Agriculture

Oil and Gas

Mining and Minerals

Retail

Wholesale Distribution

Logistics and Transportation

Commodities Trading

Relevant Teams

Legal

Finance

Treasury

Trade Operations

Risk Management

Compliance

Corporate Banking

Transaction Banking

Credit

International Banking

Relevant Roles

Chief Financial Officer

Treasury Manager

Trade Finance Manager

Corporate Banking Manager

Risk Manager

Compliance Officer

Legal Counsel

Finance Director

Trade Operations Manager

Credit Risk Officer

Relationship Manager

Transaction Banking Manager

Documentary Credits Manager

Supply Chain Finance Manager

Corporate Treasurer

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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