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Clean Letter Of Credit for the Netherlands

Clean Letter Of Credit Template for Netherlands

A Clean Letter of Credit is a formal payment undertaking issued by a bank (the issuing bank) under Dutch law, guaranteeing payment to a seller upon presentation of compliant documents specified in the letter of credit, without the requirement of additional conditions or collateral. This document, governed by Dutch law and incorporating UCP 600 rules, provides a secure payment mechanism in international trade by offering the seller assurance of payment and the buyer assurance of documentary compliance. It represents an irrevocable commitment by the issuing bank to pay, provided that the stipulated documents are presented and all terms and conditions are met.

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Clean Letter Of Credit

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What is a Clean Letter Of Credit?

The Clean Letter of Credit serves as a fundamental instrument in international trade finance under Dutch law, providing security and payment assurance to parties involved in cross-border transactions. It is particularly valuable when parties are dealing across different jurisdictions or are new to trading relationships. The document contains specific details about the transaction, including payment terms, document requirements, and shipping specifications. Unlike other types of letters of credit, a Clean Letter of Credit does not require additional security or special conditions beyond the presentation of compliant documents. This instrument is commonly used in the Netherlands' robust international trading environment and is governed by Dutch law while incorporating internationally recognized UCP 600 rules. It's essential for transactions where sellers seek guaranteed payment protection and buyers need to demonstrate their creditworthiness through bank support.

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

1. Issuing Bank Details: Complete name, address, and reference numbers of the issuing bank

2. Date and Place of Issue: Specific date and location where the Letter of Credit is issued

3. Letter of Credit Number: Unique identification number assigned to this Letter of Credit

4. Beneficiary Details: Full name and address of the party in whose favor the Letter of Credit is issued

5. Applicant Details: Full name and address of the party requesting the Letter of Credit

6. Currency and Amount: Specified currency and amount of the Letter of Credit in both figures and words

7. Expiry Date and Place: Clear statement of expiration date and location where documents must be presented

8. Available With/By: Specification of where and how the credit is available (payment, acceptance, or negotiation)

9. Partial Shipments/Transhipment: Declaration whether partial shipments and/or transhipment are allowed or prohibited

10. Document Presentation Period: Timeframe within which documents must be presented after shipment date

11. Description of Goods/Services: Brief description of the goods or services covered by the Letter of Credit

12. Documents Required: Detailed list of all required documents for presentation

13. Additional Conditions: Any specific conditions or terms that must be met

14. Bank Charges: Specification of which party bears which bank charges

15. Confirmation Instructions: Whether confirmation is requested and by which bank

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

1. Transfer Provisions: Include when the Letter of Credit needs to be transferable to another beneficiary

2. Back-to-Back Provisions: Include when the Letter of Credit may be used as collateral for another Letter of Credit

3. Red Clause Provisions: Include when advance payment facilities are to be provided to the beneficiary

4. Green Clause Provisions: Include when storage facilities and advance payment are to be provided

5. Revolving Provisions: Include when the Letter of Credit is intended to revolve in value or time

6. Special Instructions for Advising Bank: Include when specific instructions need to be given to the advising bank

7. Reimbursement Instructions: Include when specific reimbursement arrangements between banks need to be detailed

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

1. Schedule A - Document Requirements: Detailed specifications for each required document, including format and content requirements

2. Schedule B - Shipping Terms: Detailed shipping requirements, including ports, modes of transport, and specific conditions

3. Schedule C - Goods Specification: Detailed description of goods when the main body requires more elaborate specification

4. Appendix 1 - Standard Banking Forms: Copies of any standard banking forms that must be used in connection with the Letter of Credit

5. Appendix 2 - Special Instructions: Any detailed special instructions that are too lengthy to include in the main text

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

Netherlands

Document Type

Letter of Credit

Cost

Free to use
Relevant legal definitions




































Clauses


























Relevant Industries

Banking and Financial Services

International Trade

Maritime and Shipping

Manufacturing

Wholesale Trade

Commodities Trading

Agriculture and Food

Energy and Resources

Retail

Logistics and Supply Chain

Chemical Industry

Technology and Electronics

Relevant Teams

Trade Finance

International Banking

Documentary Credits

Treasury

Export

Import

Trade Operations

Compliance

Credit Risk

Commercial Banking

Global Transaction Banking

Supply Chain Finance

Financial Control

Legal

Operations

Relevant Roles

Trade Finance Manager

International Banking Officer

Documentary Credits Specialist

Treasury Manager

Finance Director

Export Manager

Import Manager

Trade Operations Manager

Compliance Officer

Credit Risk Manager

Commercial Banking Manager

Global Transaction Banking Officer

Supply Chain Finance Manager

Chief Financial Officer

International Trade Specialist

Banking Relationship Manager

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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