国际结算(双语)第六章：备用信用证 chapter6 Standby Credit

Documents bears the items of shipment period, Documents bears the only item validity, presentation period and validity. shipment period and presentation period is not indicated. Subjects to UCP600 Subjects to both ISP98 and UCP600
(9)claims indemnity
(4)notifies the standby L/C
(8)transfers the proceeds
(3)notifies the standby L/C
Issuer (6)presents Adviser
(7)exams the relative documents and then pays
3 Definition
The ICC publication No.515 international chamber of commerce documentary letter of credit guideline defines standby letter of credit as any documentary credit or similar arrangement, however named or described which represents an obligation to the Beneficiary on the part of the issuer: • (A) to repay money borrowed by Applicant, or advanced to or for the account of the Applicant or; • (B) to make payment on account of any indebtedness undertaken by the Applicant or; • (C) to make payment on account of any default by the Applicant in the performance of an obligation.
1 Commons
• Both of them are in the nature of credit, the “bible” they are both subject to is the Uniform Customs and Practice for Documentary Credit UCP600; • Both independent documents separating from the underlying contract which it is based on; • Both bear the banking credit, banks are dealing with documents, not dealing with goods; • Under both situations ,the issuing bank bears the primary liability to effect payment; • A lot similar operation procedures, such as nominated party, advising, presentation, confirmation, transfer and assignment, and etc.
3. documentary We would like to emphasis again that standby credit is documentary credit. as per the explanation of international customs, “documents” means all the commercial documents besides bill of exchange, promissory note and cheque. 4. demand payment Standby credit is a guarantee credit. when the beneficiary has presented the bill of exchange and default certificate that in apparent complies with the terms and conditions of credit, upon demand, the issuing bank should effect payment immediately.
Chapter 6 Standby Letter of Credit
• 6.1 Overview and Definition of Standby Letter of Credit • 6.2 Characteristics of Standby Letter of Credit • 6.3 Parties to Standby Letter of Credit • 6.4 Main Contents of standby letter of credit • 6.5 Procedure of Standby Letter of Credit • 6.6 Types of Standby Letter of Credit • 6.7 Differences between Standby Letter of Credit and Documentary Letter of Credit
2. independent
The standby L/C is independent. Once the standby credit is issued, it exists as a separate self-sufficient document. It is separated from the basic transaction sales between the applicant and beneficiary which is the bases to issue the standby credit, it is also separated from the contractual relationship between the applicant and the issuing bank.
5. enforceable
When the standby credit has been issued, no matter it is authorized by the applicant, charges have been take by the issuing bank or not, beneficiary has received the credit or not, the issuing bank is bound to take the responsibility stipulated in credit.
procedure of standby L/C:
Applicant (1 )sign an underlying contract, and the beneficiary requires a standby L/C; Beneficiary
(5)presents
(2)appli es for a standby L/C
Payment condition is performance of the Payment condition is in the breach of contract contract by the beneficiary. by the applicant.
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2 Differences
Documentary L/C Focus on the payment in international trade. Full set of documents need to be presented. Standby L/C Focus on guarantee or financing. Demand for payment and statement of default need to be presented.
1. irrevocable
The standby L/C is irrevocable; an issuer’s obligations under a standby cannot be amended or canceled by the issuer except that all relative parties agreed with such amendment or cancellation.