We start 2026 with a focus on how courts, technology, and compliance realities are testing frameworks that were largely built for a paper-based world.
We begin with Saibo Jin’s examination of transferable credits under UCP600 Article 38, where recent Chinese cases expose unresolved questions about legal structure, liability, and the boundary between transferable and back-to-back credits. The uncertainty continues in Rashid Hasan’s analysis of documentary collections, where limited transparency and intermediary roles create vulnerabilities to misuse and money laundering. It then reaches a more fundamental level in the next installment of Pavel Andrle’s series, which explores how ICC rules define documents, originality, and presentation in an increasingly electronic environment.
Updates this month span China’s adoption of MLETR principles, the spread of misinformation about letters of credit on social media, rapid growth in smart contracts, and MUFG’s first sustainable trade standbys in the Philippines. From the courts, a rare US decision on a URDG 758 guarantee puts independence and preclusion into sharp focus, while our New York LC Law Summit report maps the legal and regulatory terrain ahead.
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Articles
Issues Regarding Transferable Credits under UCP600 Article 38 A Chinese court decision highlights a persistent ambiguity in UCP600 Article 38: the boundary between transferable credits and back-to-back structures. Saibo Jin’s article shows how UCP600 Article 38 leaves key legal and operational relationships undefined, and why recent cases are strengthening the argument that the rule needs urgent clarification or revision.
Documentary Collections - A Different Look to Confront Misuse and Money Laundering Documentary collections rely on trust and transparency, but this article shows how easily that balance can slip, from overdue bills and “free of payment” settlements to missing transport documents and third-country shipments. It explores why these structures can be attractive for trade-based money laundering and why banks must think carefully about how much risk they are willing to carry when handling collections.
Originality of Paper and Electronic Documents (Part 4) As electronic records become more common in trade finance, this article explores what “electronic presentation” really means under ICC rules, from PDFs and SWIFT messages to machine-readable records and electronic transferable documents. It examines how eUCP and URDG 758 treat electronic documents, where guidance is still thin, and why clearer interpretation is needed to support wider and safer adoption of digital trade instruments.
Petefish Skiles & Co v. Meads-Maes USA Chiren Joint Venture Company [2025] A rare US case on a URDG 758 advance payment guarantee brings independence and preclusion into sharp focus. The court refused to stay proceedings for arbitration, reaffirming that underlying contract disputes do not delay payment on a complying demand absent fraud, and it highlighted how an issuer’s failure to act within the required time frame can trigger preclusion. At the same time, the case shows the risks of confusing a bank guarantee with an escrow arrangement and the drafting problems created by demands for “all” supporting documents.
Conference Report
2025 Americas LC Law Summit: Executive Summary From electronic letters of credit and UCC Article 12 to sanctions, insolvency, and supply chain finance risk, this wide-ranging panel mapped the legal fault lines shaping modern trade finance. A must-read for anyone navigating how courts, regulators, and practice rules are redefining certainty in documentary instruments and related financing structures.
Scam Survey
Investigators Secure Partial Recovery for Scammed Indian Banks Nearly a decade after major losses from fraudulent loans and letters of credit, two Indian banks have recovered part of their funds following Enforcement Directorate action against GS Oils. The case offers a rare look at how long-running LC fraud and round-tripping schemes can eventually be unwound through asset recovery.
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Chris Sandler is the COO of the Institute of International Banking Law & Practice, the organization which produces DCW. Reach Chris at sandler@iiblp.org
