Export letters of credit terms and conditions

Definitions

1.1 Definitions: In these Terms, the following defined terms shall have the meanings ascribed to them below.

“Acceptance Date” means, in relation to any LC drawing, the date that Barclays has (i) determined in its capacity as confirming bank that documents presented by the Beneficiary constitute a complying presentation in respect of a Confirmed LC, or (ii) received the relevant issuing bank’s advice by authenticated SWIFT message that the documents presented constitute a complying presentation in the case of any LC that is not a Confirmed LC, or (iii) received confirmation from the relevant issuing bank that all discrepancies in relation to the relevant presentation have been irrevocably waived in the case of discrepant documents.

“Barclays” means Barclays Bank PLC.

“Benchmark Rate” means:

(a) in relation to any LC drawing, or other amount, in Euro, EURIBOR;

(b) in relation to any LC drawing, or other amount, in US Dollars, Term SOFR;

(c) in relation to any LC drawing, or other amount, in Pounds Sterling, TSRR; or

(d) in relation to any LC drawing, or other amount, in any other currency, the relevant benchmark rate determined in accordance with Barclays’ standard practices.

“Beneficiary” means, in respect of any LC, the party named in that LC as the beneficiary.

“Business Day” means a day (other than a Saturday or a Sunday) on which banks in London and in the city which is the financial centre of the currency in which the relevant LC is denominated, are ordinarily open to effect banking transactions and, if a payment is to be made in a currency other than Pounds Sterling, on which any payment system chosen by Barclays is operating for the transfer of funds for the same day value.

“Confirmed LC” means any LC which bears Barclays’ confirmation.

“Disbursement Date” means in respect of any LC drawing discounted in accordance with these Terms, a date falling within two Business Days of the Acceptance Date.

“Discount Charges” means, in relation to an LC to be discounted under the agreement, the aggregate of the Risk Margin and the Benchmark Rate for the Discount Period, calculated on the maximum amount payable under that LC, subject to a minimum flat fee as advised to the Beneficiary by Barclays.

“Discount Period” means in respect of any LC drawing, the number of days from and including the Disbursement Date to but excluding the due date for payment under the LC.

“Discount Request” means a request from the Beneficiary to Barclays to negotiate and discount an LC drawing.

“€”, “EUR” and “Euro” denote the single currency of the Participating Member States.

“EURIBOR” means, in relation to any LC drawing, or other amount, in Euro:

(a) the applicable Screen Rate for the Discount Period; or
(b) if the applicable Screen Rate ceases to be available for a continuous period of two Business Days or more, such other rate as agreed between Barclays and the Beneficiary for a period equal in length to the Discount Period,
provided that, if EURIBOR is less than zero, it shall be deemed to be zero.

“Interpolated Screen Rate” means:

(a) in relation to EURIBOR:

(i) where the Discount Period is less than 12 months, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

(A) the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Discount Period relating to that LC drawing; and
(B) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Discount Period of that LC drawing,
each as, at the time, determined by Barclays and notified to the Beneficiary before the first day of the relevant Discount Period; or

(ii) where the Discount Period is equal to or longer than 12 months or it is not possible to calculate an Interpolated Screen Rate for that currency and that Discount Period, such other rate as at the time determined by Barclays and notified to the Beneficiary;

(b) in relation to Term SOFR, the rate (rounded to five decimal places) which results from interpolating as follows:

(i) where the Discount Period is shorter than one month, calculated by Barclays making a linear interpolation (in accordance with market practice) between:

(A) the applicable SOFR; and
(B) the applicable forward-looking term rate based on the secured overnight financing rate published by the Screen Rate Provider for Term SOFR at that time for a period equal in length to one month;

(ii) where the Discount Period is longer than one month but shorter than 12 months, calculated by Barclays making a linear interpolation (in accordance with market practice) between the applicable forward-looking term rate based on the secured overnight financing rates published by the Screen Rate Provider for Term SOFR for the next longer and next shorter periods for which the forward-looking term rate based on the secured overnight financing rate is available, each as, at the time, determined by Barclays and notified to the Beneficiary before the first day of the relevant Discount Period; or

(iii) where the Discount Period is equal to or longer than 12 months or it is not possible to calculate an Interpolated Screen Rate for that currency and that Discount Period, such other rate as at the time determined by Barclays and notified to the Beneficiary;

(c) in relation to TSRR, the rate (rounded to four decimal places) which results from interpolating as follows:

(i) where the Discount Period is shorter than one month, calculated by Barclays making a linear interpolation (in accordance with market practice) between:

(A) the applicable SONIA; and
(B) the applicable term sterling overnight index average reference rate published by the Screen Rate Provider for TSRR at that time for a period equal in length to one month;

(ii) where the Discount Period is longer than one month but shorter than 12 months, calculated by Barclays making a linear interpolation (in accordance with market practice) between the applicable term sterling overnight index average reference rates published by the Screen Rate Provider for TSRR for the next longer and next shorter periods for which the term sterling overnight index average reference rate is available,
each as, at the time, determined by Barclays and notified to the Beneficiary before the first day of the relevant Discount Period; or

(iii) where the Discount Period is equal to or longer than 12 months or it is not possible to calculate an Interpolated Screen Rate for that currency and that Discount Period, such other rate as at the time determined by Barclays and notified to the Beneficiary.

“LC” means a documentary letter of credit governed by the UCP.

“LC Proceeds” means, in respect of an LC drawing discounted or to be discounted under these Terms, the amount payable under the LC as at the relevant date prior to deduction of the Discount Charges.

“Participating Member State” means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

“Pounds Sterling” and “£” means the lawful currency for the time being of the United Kingdom.

“Risk Margin” means the Barclays risk margin applicable to discounting of LCs issued by the relevant issuing bank (or if applicable, via the relevant branch of that bank) and for the Discount Period requested.

“Screen Rate” means:

(a) in relation to TSRR, the term sterling overnight index average reference rate provided by the Screen Rate Provider for TSRR for the Discount Period displayed on the appropriate page made available by the Screen Rate Provider for TSRR (or on any successor, substitute or alternative page or platform made available by the Screen Rate Provider for TSRR) (before any correction, recalculation or republication by the administrator), provided that if TSRR is not available for the Discount Period on the relevant day, then TSRR for the Discount Period on the relevant day shall be the Interpolated Screen Rate;

(b) in relation to Term SOFR, the forward-looking term rate based on the secured overnight financing rate administered by the Screen Rate Provider for Term SOFR for the Discount Period (before any correction, recalculation or republication by the administrator), provided that if Term SOFR is not available for the Discount Period on the relevant day, then Term SOFR for the Discount Period on the relevant day shall be the Interpolated Screen Rate; and

(c) in relation to EURIBOR, the euro interbank offered rate administered by the Screen Rate Provider for EURIBOR for the Discount Period displayed on the appropriate page of the Thomson Reuters screen (or on the appropriate page of such other information service which publishes EURIBOR from time to time in place of Thomson Reuters), provided that if EURIBOR is not available for the Discount Period on the relevant day, then EURIBOR for the Discount Period on the relevant day shall be the Interpolated Screen Rate, provided that, in each case, if such page or service ceases to be available, Barclays may select another page or service displaying the relevant rate.

“Screen Rate Provider” means, as at the date of these Terms:

(a) in relation to TSRR, Refinitiv Benchmark Services (UK) Limited (or any other person which takes over the administration of TSRR from Refinitiv Benchmark Services (UK) Limited);

(b) in relation to Term SOFR, CME Group Benchmark Administration Limited (or any other person which takes over the administration of that rate); and

(c) in relation to EURIBOR, the European Money Market Institute (or any other person which takes over the administration of that rate), provided that, in each case, if:

(i) the Screen Rate Provider publicly announces that it has ceased or will cease to provide the relevant Screen Rate permanently or indefinitely;

(ii) in the opinion of Barclays, the Screen Rate Provider (as a provider of the relevant Screen Rate) is no longer in line with market conventions for the purposes of referencing the relevant Screen Rate under these Terms;

(iii) the supervisor of the Screen Rate Provider makes a public announcement or publishes information stating that the relevant Screen Rate (as provided by the Screen Rate Provider) is no longer or, as of a specified future date will no longer be, representative of the underlying market or economic reality that it is intended to measure and that representativeness will not be restored (as determined by such supervisor); or

(iv) in the opinion of Barclays, the Screen Rate Provider is otherwise no longer an appropriate provider of the relevant Screen Rate for the purposes of referencing the relevant Screen Rate under these Terms, then the Screen Rate Provider will, for the purposes of these Terms, be such other administrator or publisher of the relevant benchmark rate as Barclays may reasonably select.

“SOFR” means the secured overnight financing rate administered and published by the Federal Reserve Bank of New York (or any other person which takes over the administration, or publication, of that rate).

“SONIA” means the sterling overnight index average administered and published by the Bank of England (or any other person which takes over the administration, or publication, of that rate).

“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilises a single shared platform and which was launched on 19 November 2007.

“TARGET Day” means any day on which TARGET2 is open for the settlement of payments in Euro.

“Term SOFR” means, in relation to any LC drawing, or other amount, in US Dollars:

(a) the applicable Screen Rate for the Discount Period; or

(b) if the applicable Screen Rate ceases to be available for a continuous period of two Business Days or more, such other rate as agreed between Barclays and the Beneficiary for a period equal in length to the Discount Period,
provided that, if Term SOFR is less than zero, it shall be deemed to be zero.

“TSRR” means, in relation to any LC drawing, or other amount, in Pounds Sterling:

(a) the applicable Screen Rate for the Discount Period; or

(b) if the applicable Screen Rate ceases to be available for a continuous period of two Business Days or more, such other rate as agreed between Barclays and the Beneficiary for a period equal in length to the Discount Period,
provided that, if TSRR is less than zero, it shall be deemed to be zero.

“UCP” means the prevailing edition of the Uniform Customs and Practice for Documentary Letters of Credit published by the International Chamber of Commerce.

“USD”, “US$” and “US Dollars” denote the lawful currency of the United States of America.

1.2 Interpretation: For the purpose of these Terms, “discounting” an LC drawing shall mean purchasing the LC Proceeds from the Beneficiary and paying the Beneficiary the LC Proceeds (minus the charges detailed in these Terms) in advance of the date that reimbursement is due to Barclays as nominated bank or confirming bank in respect of that LC drawing.

1.3 All other terms used in these Terms shall be interpreted in accordance with the UCP. The rules of interpretation set out in UCP shall apply to these Terms.

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Terms

2. These Terms apply to all requests to Barclays by the Beneficiary to discount one or more LC drawings, unless otherwise agreed in writing between Barclays and the Beneficiary. No request to discount shall be considered by Barclays other than in connection with the Beneficiary’s presentation under the relevant LC via Barclays.

3. By submitting a Discount Request, the Beneficiary is deemed to agree that these Terms and the UCP apply between Barclays and the Beneficiary in relation to the LC drawing requested to be discounted, to the exclusion of any other terms.

4. The Beneficiary shall be deemed to represent to Barclays on the date of each Discount Request that such Discount Request is duly authorised by the Beneficiary.

5. Barclays makes no commitment to negotiate any documents and/or discount any or all LC drawings requested by a Beneficiary. If Barclays is willing to discount an LC drawing following a Discount Request from the Beneficiary, Barclays shall effect payment to the Beneficiary on the Disbursement Date in accordance with Paragraph ‎9 below. If Barclays discounts an LC drawing in accordance with this Paragraph ‎5, it shall notify the Beneficiary promptly after the Disbursement Date that the relevant LC has been discounted.

6. If, in relation to any Discount Request, Barclays does not effect payment to the Beneficiary within five Business Days from the relevant Acceptance Date, this shall indicate that Barclays is not in a position to discount the LC drawing requested and the Discount Request will expire on the fifth Business Day immediately following such Acceptance Date. Barclays may, but shall not be obliged to, give notice to the Beneficiary that a Discount Request has not been accepted.

7. Each Discount Request submitted by the Beneficiary shall constitute the Beneficiary’s irrevocable offer to sell the proceeds of the LC or the relevant drawing to Barclays, subject to Barclays’ acceptance of such offer in accordance with Paragraph ‎5 above. An agreement between Barclays and the Beneficiary to discount an LC drawing shall be constituted only when Barclays has made a payment in respect of an LC in accordance with Paragraph ‎5 above.

8. Each agreement by Barclays to discount an LC drawing shall be without recourse to the Beneficiary in the event of Barclays’ subsequent non-receipt of payment from the issuing bank, except in the case of any fraud in relation to any goods, services or documents to which the LC or LC drawing relates.

9. In respect of each LC drawing to be discounted by Barclays, the Discount Charges shall be payable in the currency of the LC and free of any tax, deduction or withholding whatsoever. All Discount Charges will be deducted from the LC Proceeds prior to disbursement to the Beneficiary, together with any other charges arising out of Barclays’ handling of the LC in accordance with Barclays’ prevailing fee tariffs for export letters of credit.

Payment shall be made on the Disbursement Date to the account notified by the Beneficiary to Barclays for receipt of such funds (subject to Barclays’ standard checks and procedures). The Beneficiary acknowledges that Barclays’ Discount Charges for LCs may vary subject to the identity and/or location of the relevant issuing bank and to the relevant Discount Period sought. Barclays may combine multiple payments of LC Proceeds due in the same currency on the same date.

10. Any agreement by Barclays to discount an LC drawing shall be based on the terms of the LC prevailing on the date of such agreement. If any change is subsequently made to the tenor or amount of the LC and subject to Barclays’ discretion to decline the amended or extended LC, additional Discount Charges may be applicable.

11. The Beneficiary agrees that, in relation to each LC drawing discounted by Barclays, all the Beneficiary’s rights, title, benefit and interest in the LC Proceeds shall be automatically assigned to Barclays on the relevant Disbursement Date with full title guarantee.

In respect of each LC drawing discounted by Barclays, the Beneficiary authorises Barclays to notify the relevant issuing bank that the LC Proceeds have been assigned to Barclays. The Beneficiary shall promptly at Barclays’ request execute any further document that may be required under the laws of any applicable jurisdiction to give effect to the assignment referred to in this Paragraph ‎11.

12. If any provision of any these Terms is or becomes invalid or unenforceable to any extent, the remainder of these Terms shall not be affected and each such provision shall be valid and enforceable to the fullest extent permitted by law.

13. All rights, powers and privileges under the documents relating to these Terms shall continue in full force and effect, regardless of Barclays exercising, delaying in exercising or omitting to exercise any of them. The rights and remedies of Barclays in respect of these Terms are cumulative and not exclusive of any right or remedy provided by law.

14. Any notice, request or other communication (including Discount Requests) under or in connection with these Terms shall:

(a) be in writing delivered personally or by prepaid first class letter, facsimile or electronic mail;

(b) be deemed to have been received by the Beneficiary:

(i) in the case of a letter when delivered personally or 48 hours after it has been sent by first class post;

(ii) in the case of a facsimile transmission, at the time of transmission (provided that if the date of transmission is not a Business Day it shall be deemed to have been received at the opening of business on the next Business Day); or

(iii) in the case of electronic mail, at the time of transmission (provided that if the date of transmission is not a Business Day or the time of the transmission is after 17.00 on a Business Day it shall be deemed to have been received at the opening of business on the next Business Day); and

(c) be sent to the postal, email or other address(es) notified by the parties for receipt of such communications.

All communications to Barclays shall be effective only on actual receipt, in readable form by Barclays. Communications received after banking business hours on any day shall be deemed to be received on the next Business Day.

15. A person who is not a party to these Terms has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefits of these Terms.

16. The Beneficiary shall not undertake any business through Barclays involving (directly or indirectly) any country or entity subject to economic sanctions imposed from time to time by applicable United Kingdom, European Union, United States or United Nations authorities without Barclays’ prior written consent.

17. The Beneficiary may not assign or transfer any of its rights under these Terms to any third party. Barclays may assign or transfer all or any of its rights and/or obligations in respect of these Terms, in whole or in part, to any person or persons.

18. From time to time and at its sole discretion, Barclays may conduct random checks and enquiries via its external agents and correspondents regarding certain aspects of trade transactions financed or proposed to be financed by Barclays. This may include, but is not limited to, checks on maritime or over-land movements of goods, carriers, forwarding agents, warehouse agents and/or parties to trade transactions.

By submitting a Discount Request, the Beneficiary is deemed to consent to Barclays conducting all such checks and enquiries. Barclays will not charge the Beneficiary for any costs incurred by Barclays in connection with any such checks and enquiries, nor will Barclays be obliged to disclose any information Barclays receives to the Beneficiary. It remains the Beneficiary’s full responsibility to conduct such enquiries and due diligence on its trade transactions as it considers necessary in all the circumstances.

19. These Terms and all non-contractual obligations arising out of or in connection with these Terms, are governed by English law and the parties to these Terms each submit to the exclusive jurisdiction of the English Courts.

20. Paragraph ‎19 above is for the benefit of Barclays only. As a result, it does not prevent Barclays from taking proceedings relating to any dispute relating to these Terms in any other courts with jurisdiction. To the extent allowed by law Barclays may take concurrent proceedings in any number of jurisdictions.

21. The Beneficiary should contact Barclays if it wishes to discuss any of these Terms. The Beneficiary may wish to seek independent advice on the terms of their agreement and the implication of these Terms.

22. Barclays wants to hear from the Beneficiary if the Beneficiary feels unhappy about the service it has received from Barclays. Letting Barclays know the Beneficiary’s concerns gives Barclays the opportunity to put matters right for the Beneficiary and improve service to all Barclays’ customers. If the Beneficiary has reason to complain the Beneficiary may do so in person, in writing by post or email or by telephone. Details of Barclays’ complaints handling procedures are available on request from any branch, the Beneficiary’s relationship team or servicing team, the Barclays Information Line on 0800 400 100* or www.barclays.co.uk^‡.

If Barclays is unable to resolve the Beneficiary’s complaint internally to its satisfaction, or Barclays has not resolved the Beneficiary’s complaint within 8 weeks from when the Beneficiary first let Barclays know about its concerns and it is an eligible complainant, the Beneficiary may be able to refer its complaint to the Financial Ombudsman Service, Exchange Tower, London E14 9SR (www.financial-ombudsman.org.uk^).

The Financial Ombudsman Service is an organisation set up by law to give consumers a free and independent service for resolving disputes with financial firms. Details of those who are eligible complainants can be obtained from the Financial Ombudsman Service.

*Calls to 0800 numbers are free if made from a UK land line.

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