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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Isp8 Revised b 2 transfer and d assignment of proceeds. A presenter may wish to instruct the issuer not to seek an applicant waiver of discrepancies where the presenter believes that the waiver will not be granted or that seeking waiver will delay notice of dishonor for curable discrepancies.
Getting Ready for ISP98: The New International Standby Practices
Consider whether one drawing for less than the full amount or multiple drawings each for less than the full amount may be made. Recent News September 19, 6: See also Rule 9. Applicant may want to limit Rule 1.
UCP is currently used for both standby letters of credit and commercial letters of credit. What law do you want? 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. No need osp98 state that letter of credit is irrevocable, or that issuer’s obligations are independent and not conditioned on payment by applicant or anyone else.
Applicants and issuers may wish to address this issue differently or more precisely in the letter of credit application e.
Both beneficiaries and issuers may want to avoid the rigors of Rule 4. Per ISP98 Rule 1. 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. Of course, all drawing requirements should be stated clearly and precisely to minimize the possibility of dispute.
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 transfer the letter of credit cf. Issuers may also wish to deal in their letter of credit application forms with issues raised by claimed successors. If the beneficiary wants to be able to assign proceeds of the letter of credit notwithstanding possible issuer objections, the letter of credit should so provide.
Where forms of the drawing documents are attached as exhibits to the letter of credit, the forms of exhibits should be drafted to comply with the Rule. The use of quotation marks or block indents or forms of exhibits is insufficient. You have no items in your shopping cart. If presentation of the original letter of credit is not a condition to an assignment of proceeds, the letter of credit must so state.
Do not use terms such as “assignable,” “evergreen,” “reinstate,” and “revolving” unless their context gives them meaning.
ISP 98- International Standby Practices
Letter of credit application ixp98 provide for applicant consent to choice of 15P98, governing law and any dispute resolution mechanism in the letter of credit. Drafting and Negotiating International Commercial Contracts.
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. 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.
International Standby Practices is a new set of rules and best practice for users of standby letters of credit. Automatic extension clauses and automatic reinstatement or reduction clauses are permitted.
Do not say “partial drawings prohibited” unless the beneficiary is only permitted to draw once for the full amount. ISP98 became effective on 1 January 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.
The issuer may want to state that it is not bound to effect a transfer where the transfer would violate any applicable law or regulation. If substitution is not desired, the letter of credit should expressly provide that the name of a transferee may not be used in place of the name of the original beneficiary on certain drawing documents or in specified places on those documents. 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. If the parties wish to permit transfers of drawing rights in their entirety Isp89 6. If the letter of credit permits the presentation of only “copies” see Rule 4.
ISP International Standby Practices | ICC Store
Consider whether the name of the transferee must or may be used in place of the name of the transferor on various drawing documents. Query how rigidly a court would enforce a requirement for identical or issp98 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. Issuer and applicant should consider whether the application isp998 authorize the issuer to accept presentations in a non-paper medium.
Parties may wish to specify to whom and by what means any notice of dishonor must be given, otherwise notice must be given to the presenter by telecommunication, if possible. Avoid use of terms such as “presentation must be made at our counters” unless the meaning is clear from the context. Installment drawings and shipments should not be a problem as Rule 3.