Given the success of practice rules and banks’ ability to more readily find resources for the proper interpretation of the rule sets, does it not make sense to avoid inclusion of a governing law or jurisdiction clause?
The recent case of Illinois DNR v. Regions Bank illustrates the importance of clear wording of automatic extension clauses and issuing banks including a final expiration date in their standbys.
From courtrooms in Illinois to conference halls in Singapore, this issue unpacks the rulings, risks, and rule debates in today’s trade finance. Glenn Ransier weighs the merits of law and jurisdiction clauses in independent undertakings, Carter Klein dissects an Illinois appellate decision on auto-extension clauses, and Muhammad Ali Haider Khan explores the rules and risks of charter party bills of lading.
Our conference coverage captures a profession in motion. The 2025 Singapore Guarantee & Standby Forum covered regulatory findings, dispute lessons, and digital-era risk strategies. The ICC Banking Commission’s August meeting addressed the line between good and typical banking practice, along with electronic authentication, notice requirements, and ISBP accessibility—reflecting a sector balancing evolving risk discipline with workable modern solutions.
Here's everything that's new:
🗓️ But first: Upcoming Conferences
IIBLP conferences return to London in September, and New York in November, continuing the decades-long tradition of bringing together bankers, lawyers, lawmakers & corporates for unique training and networking experiences. DCW will be on the scene to be part of the active discussions at the forefront of our industry. We hope to see you there.
Glenn Ransier examines the debate over including governing law and jurisdiction clauses in independent undertakings such as standby LCs and demand guarantees. While global rule sets like UCP, ISP98, and URDG758 have standardized practices and minimized disputes, some issuers still opt for law/jurisdiction clauses—potentially slowing issuance and adding risk. The article weighs whether, given the success of practice rules, such clauses are worth the trade-offs.
An Illinois appellate court reversed a trial decision that a Regions Bank SBLC auto-extend clause renewed indefinitely. The court found the wording “an additional term of one year” permitted only a single extension and rejected arguments for perpetual effect. The ruling highlights why issuers should state a clear final expiration date in standby LCs with auto-extend provisions rather than relying on UCC’s five-year rule for perpetual credits.
Charter party bills of lading (CPBLs) are uncommon in credits but bring distinct UCP600 Article 22 rules, operational nuances, and legal risks. From quasi-negotiability to vessel detention and pollution claims, these risks demand informed handling. This in-depth review explains CPBL functions, governing provisions, and practical safeguards banks can adopt to protect against liability.
The 2025 Singapore Guarantee & Standby Forum brought together practitioners to examine regulatory scrutiny, evolving risk practices, and the shifting role of standbys. Highlights included MAS’ findings on commodity finance governance gaps, practical cautions around e-presentation, recent cross-border case law on certification, injunctions, and back-to-back undertakings, as well as strategies for risk distribution using BAFT’s MRPA. Discussions also explored drafting essentials for digital trade instruments, the role of standbys in developing economies, lessons from a fax-presentation dispute, and the benefits of updated ISP98 Model Forms. The program reflected a market focused on clarity, risk discipline, and workable adoption of technology.
The August 2025 ICC Banking Commission meeting delivered a packed agenda, from the withdrawal of an opinion on “surrendered” bills of lading to debates over whether certain actions are “good” or merely “typical” banking practice. Members weighed in on electronic authentication, notice of refusal requirements, and whether ISBP-based discrepancies hold up under UCP600. Updates on multiple Technical Advisory Briefings, the ISBP Education Project’s pricing and accessibility goals, and the possible postponement of the ISBP revision underscored the Commission’s balancing act between refining rules and expanding their reach.
A Massachusetts federal court dismissed a borrower’s multi-count complaint against Flagstar Bank over an erroneous mortgage debit, finding no civil cause under criminal statutes, no valid UCC Article 5-109 claim, and no actionable negligence where the bank had reimbursed the funds.
A Harare court is hearing fraud charges against two men accused of luring a transport firm executive into a $20,000 standby LC “investment” with a promised multimillion-dollar return. The case has yet to conclude and no funds have been recovered.
💡 In Case You Missed It
DCW members now earn 4 Continuing Professional Development (CPD) credits each year—one per quarter—for staying current with our trade finance coverage. These credits apply toward qualifications like CDCS, CSDG, CTFC, CSCF, and similar credentials. The Q2 2025 certificate, worth 1 CPD hour and valid through September 30, 2025, is now available. View details and download your certificate.
Chris Sandler is the COO of the Institute of International Banking Law & Practice, the organization which produces DCW. Reach Chris at sandler@iiblp.org
