DCW Monthly: January 2025

The first month of the year is in full swing, and the trade finance world isn’t slowing down. 

Standby LCs are in the spotlight, with industry veterans weighing in on their evolving role. Courtrooms are busy too—one high-stakes LC dispute just put fundamental banking principles to the test. Meanwhile, regulatory shifts, institutional shake-ups, and a staggering USD 327 billion in U.S. LC issuance keep the landscape moving. From fresh ICC guidance to a deep dive into trader defaults, we’ve got the insights you need to stay ahead.

Here's what's new from DCW:

Articles

Standby LCs: A Reliable Tool in International Trade

Low default rates, increased flexibility, technological advancements and evolving regulations make standby letters of credit (SBLCs) an appealing option in international trade.

-Gyanendra Prasad

Questions and Observations on the Shinetec Case

A dispute involving an ISP98 standby and litigation in two jurisdictions raises a host of considerations. Here, Carter Klein comments on five facets of the Shinetec (Australia) Pty Ltd. v. The Gosford Pty Ltd Australian appellate court decision.

-Carter Klein

Shining Light on the Fading Concept of Strict Compliance

In the third installment of his DCW article series on major issues surrounding potential revision of UCP, ICC Banking Commission Senior Technical Advisor Dave Meynell confronts continuing misplaced reliance on strict compliance.

-Dave Meynell

Receiving Direct Presentation from a Second Beneficiary: What’s an Issuing Bank to Do?

How are LC specialists to understand UCP600 Article 38(k) in situations where a second beneficiary bypasses the transferring bank and presents documents directly to the issuing bank? Scenarios, fundamental issues, and a proposal for revising this UCP sub-article are addressed here.

-ATM Nesarul Hoque

Hard Cases – Taking Stock of How Trader Defaults and Geopolitical Events Shaped LC Court Decisions in 2024

In the first of a two-part article, Robert Parson looks back at major LC court cases of 2024 and their impact on an increasingly complex environment for trade finance.

-Robert Parson

LC Issuance Statistics

See how FIs measure up in the U.S. LC market with DCW’s 3Q24 LC Issuance Report, which ranks the top 600 U.S. banks by their issuance of standby and commercial LCs.

With over USD 327 billion in total LC issuance for 3Q24, this data provides key insights into the competitive landscape of trade finance. Explore the rankings now to see where the industry’s biggest players stand—and where your bank fits in.

Updates

• ICC Revises Guidance on Use of Sanctions Clauses
• ICC Signals ISBP Will Not Include Treatment of Sanctions Clauses
• Air Waybills and Questions of Endorsement
• UNCITRAL’s Draft Convention on Negotiable Cargo Documents Entering Final Phase
• ABA and BAFT Announce Split
• Pakistan Bans Import of Specified Polyol Chemicals
• Nigeria, China Renew Currency Swap Agreement
• In Memoriam: Francisco Rodriguez

Litigation Digest

Consolidated Electrical Distributors, Inc. v. United Renewable Energy Co. [2024]

In a high-stakes dispute over a $35 million standby letter of credit, a U.S. court denied an ex parte motion for a temporary restraining order (TRO) sought by a major U.S. importer. The case—Consolidated Electrical Distributors, Inc. v. United Renewable Energy Co.—highlights key legal principles surrounding LC independence, material fraud, and irreparable harm.

📖 Read the full breakdown in DCW’s latest Litigation Digest.

LC Scam Survey

• Indian Importer, Officials Booked for Cheating Tied to LC
• Pakistani Businessman Charged with Export, Banking Fraud