International Standby Practices (ISP98) offers a precise and detailed framework for practitioners dealing with standby letters of credit. The current version is ISP98, ICC Publication No For information on ISP98 and standby letters of credit, see Practice note, Bonds, guarantees and standby. The 89 Rules in International Standby Practices (ISP98) offer a precise and detailed framework for practitioners dealing with standby letters of credit. Developed.
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Getting Ready for ISP98: The New International Standby Practices
If it is intended that presentation may be made by fax, the letter of credit should so state. In is;98, the Certified Standby and Guarantee Professional certification programme provides comprehensive training and tests mastery of ISP98 as well as the other practice rules. It does not, however, change the “stated expiration date” to that first following business day. If the parties wish to permit transfers of drawing rights in their entirety Rule 6.
ISP98 reflects generally accepted practice, custom, and usage of standby letters of credit. Getting Ready for ISP The precise place for presentation should be specified in the letter of credit. No need to state that letter of credit is irrevocable, or that issuer’s obligations are independent and not conditioned on payment by applicant or anyone else.
Letter of credit application should provide for applicant issp98 to choice of 15P98, governing law and any dispute resolution mechanism in the letter of credit. ISP98 provides ammunition to argue for the deletion from standby letters of credit of the terms “unconditional,” “absolute,” “primary,” “clear,” “payable on demand,” and “payable from the issuer’s own funds.
If the timing period is shortened, the issuer may wish to use special procedures e. Issuers may also wish to deal in their letter of credit application forms with issues raised by claimed successors.
Whether an issuer that takes more than three business days but less than seven business days has acted within a reasonable time will depend upon the circumstances, but will not depend upon whether the beneficiary has an imminent deadline to re-present Rule 5. This is especially important if the letter of credit requires presentation of the original as a condition to drawing or if the beneficiary ever wants to lsp98 the letter of credit cf. Of course, all drawing requirements should be stated clearly and precisely to iso98 the possibility of dispute.
A cover instruction accompanying ksp98 presentation may specify to whom notice of dishonor should be sent and what means of telecommunication should be used to transmit the notice. ISP98 was designed not only for bankers who already knew the practices being articulated, but also for lawyers and corporate users who may not be intimately familiar with them, and ultimately judges who must decide disputes.
Though standby letters of credit have similarities with commercial letters of credit and iso98 financial instrument, there are significant differences in scope and practice. Create an account My account Login Lost password Shopping basket.
ISP International Standby Practices | ICC Store
Requiring Invoices Under Jsp98 LCs In the current double issue of Documentary Credit World, an experienced trade Finance Head decries the practice of requiring invoices under standby LCs, putting forth an interesting example to elicit reader comments.
Consider whether the name of the transferee must or may be used in place of the name of the transferor on various drawing documents.
The use of quotation marks or block indents or forms of exhibits is insufficient. UCP reflects letter of credit practice more generally. Unless a confirmer wishes to be a guarantor of the issuer’s performance, the confirmer should provide that it is obligated only if the drawing documents are presented to the confirmer.
Beneficiary should consider requesting issuer to agree in letter of credit to replace the original osp98 of credit if it is lost, stolen, mutilated or destroyed. If it is desired iwp98 the documents must also be examined for inconsistency, then the letter of credit should so provide. Portions of UCP emphasize commercial letters of credit and the documents typically presented under commercial letters of credit, whereas ISP98 is devoted to standbys. Applicants may request that issuers undertake some responsibility in this regard, but absent special fee arrangements or izp98 circumstances, issuers may be reluctant to do more than confirm that they will act honestly.
Both beneficiaries and issuers may want to avoid the rigors of Rule isl98. Issuers need to realize that they may be obligated under certain circumstances to honor a presentation by a claimed successor to the beneficiary. Automatic extension clauses and automatic reinstatement or reduction clauses are permitted. Drafting and Negotiating International Commercial Contracts.
C for 1, shares of General Motors Corp. Therefore, if the letter of credit provides that ixp98 January 31, expiration date will be automatically extended for another year on each anniversary of its expiration date, it should be clear that the successive expiration dates will be January 31,January 31,January 31,January 31,etc.
Getting Ready for ISP The New International Standby Practices – FindLaw
Installment drawings and shipments should not be a problem as Rule 3. See also Rule 9. Recent News September 19, 6: ISP98 reflects a distillation of practices from a wide range of standby users: See also current UCC Article 9 on secured transactions and proposed UCC Revised Article 9 specifying where assignment may be made despite contractual provision prohibiting assignment.
Issuer may want an express provision that it is not obligated to effect an assignment where prohibited by any applicable law or regulation or where it is not required by any applicable law or regulation to effect an assignment.