DCW Monthly: June 2026
A letter of credit is built on a simple promise: the bank pays on a complying demand, and the underlying
Assessing the risk of breaching regulatory and compliance requirements while simultaneously examining for documentary compliance under stringent time pressures has complicated banks’ trade finance operations for years. A UK Supreme Court decision provides a degree of comfort and clarity to banks.
It’s the kind of scenario that keeps a bank’s in-house trade finance lawyer up at night: Having received a complying demand under a documentary instrument, determining if the applicable sanctions laws and regulations prohibit the bank from paying that demand.
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