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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Portions of UCP emphasize commercial letters of credit and the documents typically presented under commercial letters of credit, whereas ISP98 isl98 devoted to standbys.
Recent News September 19, 6: Query how rigidly a court would enforce a requirement for identical or exact wording, on the one hand, and how much latitude a court would give a beneficiary to deviate from quoted requirements, blocked text or forms of exhibits, on the other hand. You have no iwp98 in your shopping cart.
ISP 98- International Standby Practices
Letter of credit application should provide for applicant consent 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.
Requiring Invoices Under Standby 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. ISP98 can also be used for independent demand guarantees.
Installment drawings and shipments should not be a problem as Rule 3. The presenter should decide if it believes the documents are discrepant before it asks for a waiver or should consider reserving its right to assert that the documents are not discrepant If the letter of credit requires presentation of negotiable or otherwise valuable documents, the letter of credit should provide for disposition return of the documents upon dishonor.
This paper, which is adapted from a presentation to the American Bar Association Subcommittee on Letters of Credit, focuses on ISP98 provisions that may lead to changes in forms of standby letters of credit and reimbursement agreements, that may lead to changes in standby practices, that may alert izp98 to issues they had not previously focused upon, or that parties may wish to limit or vary.
It also provides that taking beyond seven business days is deemed unreasonable. In addition to functional definitions, ISP98 addresses obligations, presentation, examination of documents, notice and preclusion, transfer, assignment, and transfer by operation of law, reimbursement obligations, and timing.
If “exact” or “identical” wording is wanted in drawing documents, it must be expressly required in the letter of credit. In addition, the Certified Standby and Guarantee Professional certification programme provides comprehensive training and tests mastery of ISP98 as well as the other practice rules.
Where forms of the drawing documents are attached as exhibits to the letter of iso98, the forms of exhibits should be drafted to comply with the Rule.
Getting Ready for ISP98: The New International Standby Practices
Consider whether the name of the transferee must or may be used in place of the name of the transferor on various drawing documents. Create an account My account Login Lost password Shopping basket. This risk is greatest where there are multiple nominated persons, as is iep98 case with a freely negotiable credit.
See Article 1 sip98. Sign up for our newsletter: Do not use terms such as “assignable,” “evergreen,” “reinstate,” and “revolving” unless their context gives them meaning. ISP98 is expected to become widely used for standby letters of credit commencing January 1, Reprinted with permission from Is9p8 Credit World.
Issuers need to realize that they may be obligated under certain circumstances to honor a presentation by a claimed successor to the beneficiary. Parties are free to vary the day extension period provided in Rule 3. Beneficiaries may also request a provision stating the consequences if the issuer fails to reopen for business within a specified time period. If the timing period is shortened, the issuer may wish to use special procedures e. An invaluable source of practical information for trade finance professionals and academics!
For instance, if the letter of credit requires presentation of a drawing certificate stating that attached thereto is original stock certificate no. 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.
It lsp98 that if the last date for presentation stated in the letter of credit is not a business day of the issuer, then presentation made on the first following business day shall be deemed timely. If it is desired that the documents must also be examined for inconsistency, then the letter of credit should so provide.
Ksp98 avoids these problems and anticipates issues that commonly arise under standby practice. Thus, each presented document need only comply with the requirements provided in the letter of credit for such document. UCP reflects letter of credit practice more generally. International Standby Practices is a new set of rules and best practice for users of standby letters of credit. A new set of Rules was therefore required for this workhorse of commerce and finance and ISP 98 fills this important gap in the market ip98.
Therefore, if the letter of credit provides jsp98 its 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.
Applicants may request that issuers undertake some responsibility in this regard, but absent special fee arrangements or unusual circumstances, issuers may be reluctant to do more than confirm that they will act honestly.
An is98 that wishes to require compliance with a non-documentary condition ixp98 limit this Rule or re-work the condition into a documentary condition. If presentation of the original letter of credit is not a condition to transfer drawing rights, the letter of credit must so state.
Getting Ready for ISP The New International Standby Practices – FindLaw
If the letter of credit permits the presentation of only “copies” see Rule 4. Express submission to court jurisdiction. Automatic extension clauses and automatic reinstatement or reduction clauses are permitted.