This month we’re exploring where traditional instruments meet modern LC practice, focusing especially on the complications surrounding drafts and
For the 7th year, the Institute of International Banking Law & Practice conducted its one-day Americas Trade Finance Compliance Annual Meeting. This summary provides an overview of topics discussed at the conference hosted by S&P Global on 2 April 2025 in New York and conducted as a hybrid event.
The ICC has neither accepted the draft as a standard requirement, nor have they been successful in casting it out from LC practice. This article is an attempt to resolve the confusion and place bills of exchange laws and the UCP in their proper perspectives.
This month we’re exploring where traditional instruments meet modern LC practice, focusing especially on the complications surrounding drafts and non-documentary conditions.
Rupnarayan Bose charts a course away from bills of exchange, while David Williams clarifies what conditions can and cannot bind an issuer. Our exclusive survey of the ICC’s eUCP Directory reveals tepid adoption despite technical readiness, and Gabriel Sham highlights the risks when credit insurance is treated as secure collateral. Jonathan Brewer connects export controls and WMD enforcement to the latest field findings out of North Korea, where Western components are still turning up in sanctioned missiles.
Also inside: legal insights from Colorado on whether LC costs can be recovered on appeal, updates from Singapore and Bangladesh, and fraud cases involving fertilizer, false documents, and a billion-dollar fugitive still dodging extradition.
Let's get right into it:
Despite decades of tension between drafts and documentary credits, the ICC has yet to fully untangle the bill of exchange from UCP rules. In this meticulous article, Rupnarayan Bose outlines the legal supremacy of BoE law over ICC practice, the operational confusion that results, and the hazards of forcing banks to “sail in two boats.” From defining sight and deferred payment to dissecting ICC Opinions and their logical gaps, Bose makes the case for an overdue course correction: cut drafts from UCP600 and update the rules for the realities of modern finance.
-Rupnarayan Bose
Non-documentary conditions remain a persistent source of confusion in standby and guarantee practice. In this article, David Williams unpacks how the ICC Rules treat conditions not tied to specific documents, clarifying that issuers have no discretion to enforce them and that their inclusion can undermine the independence principle. Drawing on examples from URDG758, ISP98, and UCP600, Williams explains how careful drafting and a documentary mindset reduce disputes and support enforceability.
DCW surveyed banks listed in the ICC’s eUCP Directory to assess its impact 18 months after launch. Despite a few encouraging signs from China and select European institutions, most respondents report unchanged issuance and advising volumes. While the rules themselves appear sound, a combination of internal caution, limited client demand, and low visibility has kept adoption flat. DCW Executive Editor Christopher Byrnes highlights both the operational realities and the perception gap that continue to stall eUCP’s broader uptake.
-Christopher Byrnes
A recent Singapore judgment underscores the risks banks face when relying on credit insurance policies as security. In a dispute involving Marketlend and QBE, the court rejected all claims due to procedural and disclosure failures, including a breach of the policy’s assignment clause. Gabriel Sham distills four key lessons, reminding lenders that operational discipline, policy vetting, and proof of genuine trade are essential when credit insurance underpins exposure.
Drawing on themes from the 2025 TF Compliance Annual Meeting and new evidence from the field, Jonathan Brewer examines how export controls have been used to slow the development of WMD programs in Iran and North Korea. Recent findings of Western-made components in North Korean missiles launched by Russia underscore the limitations of current enforcement and the resilience of illicit procurement networks. Brewer outlines the gaps in oversight, the need for more rigorous supply chain due diligence, and the urgency of replacing the UN’s disbanded DPRK panel with a new investigative body.
IIBLP conferences are in Singapore on 19-21 May, 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. There's still time to register:
May 19: The Guarantee & Standby Forum
May 20: The Annual LC Survey
May 21: The Trade Finance Compliance Annual Meeting
Executive Summary
The recent Trade Finance Compliance Meeting in New York covered wide-ranging topics including US export control enforcement under Trump’s America First Trade Policy, implementation challenges with General Prohibition 10, and compliance pressures around China, Russia, Iran, and Venezuela. Panelists explored red flags in trade finance, the role of financial standbys, risks tied to dark fleet vessels, and the evolving role of beneficial ownership disclosures. Enforcement themes were underpinned by recent cases from Singapore, the UK, and the US. Key takeaways emphasized stronger collaboration with BIS, effective sanctions screening, and the need for more agile internal processes as global compliance risks escalate.
In this case of first impression in Colorado, the appellate court reversed the trial court’s denial of costs related to supersedeas letters of credit. Following a partial appellate victory, Plaintiffs sought recovery of fees paid to secure LCs used in lieu of a traditional bond. The trial court had ruled that such fees constituted unallowable “borrowing expenses.” The Court of Appeals disagreed, finding that LC fees fall within the meaning of “premiums” under Colorado’s appellate cost rules, as they function as payment guarantees pending appeal. While allowing LC costs in principle, the court remanded for further proceedings to assess whether all claimed amounts were reasonable. The judgment clarifies that LC costs, when reasonably incurred for supersedeas purposes, are recoverable in Colorado appellate practice.
Fugitive jeweler Mehul Choksi was arrested last month in Belgium at India’s request over his role in the USD 1.8 billion PNB LC fraud. Despite open arrest warrants and mounting pressure from Indian authorities, Choksi is expected to fight extradition on medical grounds. A legal appeal is underway as he remains in custody.
A senior ex-official in Sri Lanka’s Agriculture Ministry has been arrested for authorizing the reopening of suspended LCs tied to a questionable fertilizer shipment from China. Authorities allege the move caused a USD 6.9 million loss to the government. The case stems from a 2021 import of substandard goods and is now under investigation by CIABOC.
That's it for now, and as always you can expect emails each week with trending pieces, deeper dives, and new features.
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For the 7th year, the Institute of International Banking Law & Practice conducted its one-day Americas Trade Finance Compliance Annual Meeting. This summary provides an overview of topics discussed at the conference hosted by S&P Global on 2 April 2025 in New York and conducted as a hybrid event.
The ICC has neither accepted the draft as a standard requirement, nor have they been successful in casting it out from LC practice. This article is an attempt to resolve the confusion and place bills of exchange laws and the UCP in their proper perspectives.
The ongoing effort to revise ISBP 821 (2023) has now reached an advanced stage with an updated Draft 3 revision
On 20 April 2025, Bangladesh Bank’s Foreign Exchange Policy Department issued FE Circular Letter No. 14, “Remittance against import
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