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The Trade Finance Agreement serves as the primary legal framework for trade finance transactions in Saudi Arabia, establishing the relationship between financial institutions and their customers engaged in domestic and international trade. This document is essential when parties seek to establish ongoing trade finance facilities, whether through conventional or Islamic structures, and is particularly relevant for businesses requiring regular access to trade financing products. The agreement must comply with Saudi Arabian laws, including the Commercial Courts Law, Banking Control Law, and SAMA regulations, while adhering to Shariah principles. It typically covers various trade finance products including letters of credit, guarantees, documentary collections, and Islamic structures such as Murabaha and Wakala, providing flexibility to accommodate different trading needs while ensuring regulatory compliance.

1. Parties: Identification of the parties to the agreement, including the financial institution and the customer

2. Background: Context of the agreement and basic premises, including reference to Shariah compliance

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including Arabic terms where relevant

4. Facility Structure and Purpose: Details of the trade finance facility, its Shariah structure, and permitted uses

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

6. Operational Mechanics: Procedures for utilization requests, disbursements, and payments

7. Islamic Finance Provisions: Specific provisions ensuring Shariah compliance and relevant Islamic finance principles

8. Representations and Warranties: Statements of fact and assurances given by the customer

9. Covenants: Ongoing obligations of the customer throughout the facility period

10. Events of Default: Circumstances constituting default and their consequences

11. Security Provisions: Details of security arrangements and guarantees

12. Payment Provisions: Terms relating to payments, currencies, and calculation methods

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

14. Governing Law and Jurisdiction: Saudi Arabian law as governing law and jurisdiction provisions

15. Notices: Communication procedures between parties

16. Counterparts: Execution in multiple counterparts if applicable