DCW maintains a list of recently-decided court cases involving commercial letters of credit, standby LCs, demand guarantees, and other trade
The views expressed by the authors in this publication do not represent their employers or any agency. Any content should
This month we’re digging into the legal, operational, and regulatory tensions at the core of LC and guarantee practice.
Fraud prevention is a crucial pursuit, but is an interim/hybrid solution requiring a beneficiary’s bank to vouch for the beneficiary the answer? Or does it introduce added risks?
Fraud prevention is an ongoing goal. In the world of commercial LCs, standby LCs, and demand guarantees subject to either UCP 600, ISP98, or URDG758, banks/guarantors are not responsible for vetting or otherwise verifying any signatures on any of the drawing documents received. Additionally, the basic premise of the various rules is that banks are not responsible to vet any content or otherwise go beyond the four corners of any required document to determine whether any statement is true or false.
However, with the exception of UCP, these same rules indicate that when a non-paper or data demand is allowed, the bank receiving the data is expected to authenticate the sender of the data (data could be transmitted by a beneficiary, its forwarder, transportation carrier, chamber of commerce, etc.) in some manner, understanding that different systems/platforms employ different methods to ensure an authentication process. eUCP would be the applicable rules for data demands allowed by a commercial LC.
The views expressed by the authors in this publication do not represent their employers or any agency. Any content should
This month we’re digging into the legal, operational, and regulatory tensions at the core of LC and guarantee practice.
Since a draft was included in the presentation at issue in ICC Opinion TA.948, it prompts important questions about examination not only under UCP but also under bills of exchange law.
A simpler, more standardized approach to standbys benefits everyone and the ISP98 Model Forms offer built-in best practices.
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