First rules introduced
on standby letters of credit
Paris,
29 October 1998 -
Five years
in preparation, the first ever Rules on International Standby Practices (ISP98)
come into effect on January 1, 1999. The Rules will make it possible to draft
a standby letter of credit correctly, without being an expert.
Created by the Institute for Banking Law and Practice,
revised and adopted by the ICC, and designed to be compatible with the UNCITRAL
Convention on Independent Guarantees and Standby Letters of Credit, the ISP
Rules are the product of an exhaustive consultation involving bankers, lawyers,
merchants, corporate treasurers and credit managers, government agencies, regulators
and distinguished academics.
The new Rules
- Contain precise definitions of key terms such
as "original" and "automatic amendment"
- Cover in detail the standby process from "Obligations"
to "Syndication"
- Provide neutral rules acceptable in most situations
- Save both time and expense in negotiating and
drafting standby terms
- Help avoid litigation and unexpected loss
- Propose basic definitions should the standby
involve presentation of documents by electronic means
- Set an international standard for the use of
this fast-growing financial instrument
First associated with the US market, the standby
is now a truly international product. The amounts of standbys outstanding in
value terms exceed those of commercial credits by a ratio of more than 5:1.
In 1997, more than US$ 450 billion in standbys were held by non-US banks in
the US market alone.
Implementing ISP98 in practice offers the seal of quality, reliability and integrity
by which standbys will be measured.
ISP98 will receive acceptance, not only from bankers
and merchants, but also from lawyers, judges,
rating agencies, corporate treasurers,
credit managers, regulators and academics.
How to order
Order ISP98 from ICC Business Bookstore. Note
that bulk orders receive attractive discounts. For such orders, and for personalization
of the Rules by placing the name and logo of your company on the cover, contact
ICC Publishing for details.
ICC Business
Bookstore