From supply chain finance transparency to the boundaries of SBLC practice, November brings a series of developments that cut across legal, regulatory, and market dynamics in trade finance.
This month’s pieces examine the collapse of First Brands and its ripple effects for SCF governance, revisit the controversial “pay and walk” mechanism in standbys, and unpack ICC Opinion TA954’s interpretation of auto-extension clauses. On the operational and policy front, we cover FinCEN’s updated SAR guidance, Bangladesh Bank’s tighter rules on LC splitting, and the institutionalization of AI training inside major global banks. A notable Singapore appellate decision adds to a growing body of case law on unconscionability, ISP98 interpretation, and the limits of injunctions in standby LC disputes.
We also review ICC’s newly released 2025 Trade Register and report on the latest batch of ICC Opinions—timely insights for practitioners navigating recurring issues across guarantees, collections, and expiry mechanics.
The bankruptcy of First Brands has amplified concerns over opacity in supply chain finance after more than USD 3 billion in SCF and factoring liabilities surfaced. This deep dive explains how Payables Finance, true-sale receivables purchase, and off-balance-sheet treatment actually work—highlighting why the USD 2.3 billion in “factoring debt” appears tied not to SCF itself, but to suspected irregularities in collections and duplicate financing. A clear map of where governance broke down and where SCF remains structurally sound.
Pay and walk clauses allow banks to discharge obligations early, but they bring uncertainty, potential disputes, and difficult questions about irrevocability. This article examines why the mechanism remains controversial and whether cash-collateralized structures offer a more balanced solution that preserves independence and reduces disputes.
ICC Opinion TA954 explores whether a late non-extension notice prevents an SBLC from expiring and how “notify” should be interpreted in auto-extension clauses. This analysis outlines the Commission’s reasoning on issuer obligations, attempted applicant waiver, and the risks that follow ambiguous drafting—particularly under UCP600.
ANZ Manila Branch v. China National Electric Engineering & Bank of Jiangsu China’s Supreme People’s Court dismissed a retrial bid involving a standby/counter standby structure, leaving intact a ruling that Bank of Jiangsu remained liable after failing to timely dishonor a complying demand. The Court rejected fraud allegations and new ISP98 arguments, and the commentary critiques the broader implications for classifying standbys as independent guarantees under PRC law.
Ryobi Tactics v. UES Holdings In this earlier Singapore decision, the High Court restrained calls on three performance bonds tied to unrelated projects, grounding its ruling in contract interpretation while acknowledging unconscionability principles. The case underscores the importance of bond wording in multi-project disputes.
ICC has released a new batch of Opinions addressing recurring problem areas: open-ended guarantees, URDG 758 demands, UCP600 auto-extensions and late refusals, and URC 522 collection duties. While the rules remain unchanged, the Opinions offer timely guidance for practitioners confronting ambiguous drafting and persistent operational disputes.
Scam Survey
An English High Court has ordered PrivatBank’s former owners, Ihor Kolomoisky and Gennadiy Bogolyubov, to pay more than USD 3 billion following findings that they orchestrated a massive fraudulent lending scheme. The ruling caps years of litigation pursued in London amid concerns of undue influence in Ukraine. With a worldwide freezing order already in place, PrivatBank is preparing to enforce the judgment against the former owners’ global assets. See full article
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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
