Context Setting

In cross border trade companies are exposed to counter party default risk. From early 19^th century onwards the above referred banking instruments are used by the parties with the hope of assured payment by the banks. Contrary to the expectations in most of the cases letter of credit transactions are struck in between. Either exporter has received a letter of credit with risky conditions or importers have opened letter of credit with ambiguous conditions. In some of the cases LC transaction is held up because of the different practices followed by document examiners in issuing bank. Ultimately parties are not able to get the desired benefit of these instruments. 

Bank guarantees(BG) - known as ‘demand guarantees’ - are subject to Uniform Rules for Demand Guarantee URDG 758. Some of the domestic guarantees are subject to Indian Contract Act 1872 (amended). Recently due to the amendment of Section 28 of Indian Contract Act there is a need for incorporating ‘claim period’ by default. Court also intervenes in bank guarantee transactions.

Objective

Standby letters of credits (SBLC) are receiving fairly good response nowadays. Whether SBLC is subject to ISP 98 or still subject to UCP 600? When SBLC can be used in lieu of LCs or BGs?

These are some of the issues in the market. COVID 19 has added anxiety to trade payments. Some transactions are held in the midway. Some transaction could not be completed because of certain events beyond the control.

Key Takeaways

• Impact of terms of delivery in a commercial transaction with specific reference to the changes introduced in INCOTERMS 2020.
• Structuring a letter of credit transaction – relation between commercial contract – LC application and LC format (MT 700) with the relevant UCP 600 Rules. – with case study.
• LCs from under developed countries in MT 710 format – precautions to be taken. With case study
• Presentation of discrepancy documents – possible or impossible – commonly observed avoidable discrepancies – discussion with reference ISBP 745 (International Standard Banking Practice on Examination of documents under documentary credit). This publication is not known to most of the exporters and importers. With case study.
• Stages of a Bank guarantee transaction – drafting – issuing – invocation of a guarantee transaction. With case study
• Standby Letters of credit – operational issues – comparing funding requirements under SBLC transactions. With case study
• Guidance paper released by ICC Paris on the impact of COVID 19 on trade finance transactions – with practical examples.
• Digitization of trade transactions – market response

Participation Fees

Venue

Online - Microsoft Teams Platform

Coordinator