![]() ![]() However, most SBLCs never receive a drawing, (also known as: claim or demand for payment) and simply expire in accordance with a SBLC’s stated expiry date/period. While a SBLC may include a reference to an underlying contract between an applicant and a beneficiary the issuer’s obligations remain fully independent of any underlying contract to which it may be supporting.Īs an independent undertaking, the issuer of the SBLC has its own obligation to ultimately pay the beneficiary (or another bank which has already paid the beneficiary such as a confirming bank) on receipt of a document/presentation made by, or on behalf of the beneficiary, which comply with the terms and conditions of the SBLC. In most cases and depending on the nature of the type of SBLC being issued, a beneficiary is typically only authorized to claim payment from an issuer in situations where the applicant is unable to successfully conclude the underlying contract. An applicant’s ability to obtain a SBLC from an issuer reflects good faith as the SBLC supports an applicant’s credit quality. When the issuer bears a stronger credit rating, a SBLC is also a credit enhancement tool. The obligations of the SBLC or “undertaking” supplement, and are in addition to, any other underlying contract/agreement between the issuer’s client (In SBLC terms, the client is most often referred to as the applicant) and the client’s contract counterparty (In SBLC terms, the counterparty is known as the beneficiary). An undertaking provides the named beneficiary with an “independent” assurance of payment from the undertaking’s issuer (issuers are most often banks). The global rule sets which govern standby letters of credit (SBLC) - both the Uniform Customs and Practices current revision 600 (UCP 600) and International Standby Practices current revision (ISP98) - define a SBLC as an “undertaking”. IMB NVOCC Bill of Lading Certificate (NBL).ICC Code for Ethical Marketing & Advertising (EMA).Certificate on the Common Reporting Standard (CCRS).Microfinance Associate Certificate (MAC).E-Invoicing Solutions Certificate (ESC).Free Trade Agreement Certificate (FTAC).Certified Trade Finance Professional (For GTC & CDCS Holders).Certified Trade Finance Professional (CTFP).Certificate in Digital Trade Strategy (CDTS).
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