standby letter of credit frauds
8;X0EgQ(;P')dF]#9fp=`V,5
Ldi/f+4TX7"jc`fSp?V8et8n,@#P#i,528f_)J"eUV=q*7`CgW4&h1%o`lIaS[(A94Q
7B"?1[L$Md'i]3&FhCq&4ltc6"X*NIs_RX4!p*oYM2POGlYBO>LQ=6RepaQ_VFZ_ChGJ(22QtQ`9&QV/\N>2:gVJJF'@Jq0_\u!6`E"F
endstream
endobj
105 0 obj 1692
endobj
106 0 obj<>/ProcSet 2 0 R>>>>
endobj
107 0 obj<>stream
His co-defendant, also from Michigan, was sentenced to a lesser term. endstream
endobj
77 0 obj 2412
endobj
78 0 obj<>/ProcSet 2 0 R>>>>
endobj
79 0 obj<>stream
",^Ie*-H(>h%'+$])ig2%uJBgN+S1`ZM6
X9@WSf:[,oY3Si#X'Ofq$&7d4]GbWgP-j]4Z>WB2]1cM/-2Q2)[i,GDa3e=Bb1Nj[
PFX(fTgi_m&TJ'uT`->[!Bnoo1=u9o-fd`lKVU*@^a5d*9e.3-iZBC+hm7pDD0YA/
,s,Ob!gPiFj9rcaf`W-fZZ$2dk:n0c#EGAj4ZQft#'N-Po,7Au#lE?9KA.c.TiDQM
,l[\Yh1#I&5t\N~>
LgM^#,"!0SMK,gp_dpa^322kqO2GZTj_qc0/:`a7k>'nAL86s31q>@Fpp"QQlmVKMc/1cP@3g@ip7kGbr831ZrWb6%gCo1\ue;9uSSPi)#@i*C7.Rc4hb)N`B5"iqm"1-Q-_
0_nCGIcRegOeVK'G^LdIY9,m-@d7D_C=W2d
4Nq]r$-]m4SGeGcDfp-Q/A22&G'Y#%Mn-I5`VqpalP[Jfh%(\tmWYfuomSqd!OU#J&KhXZ$Xc)m]e&/r-F3Qo~>
C%*.^9p5"?G>_ip!QH[M4cGX#ZUECkC:@N0/lt&R&bM*$`.cR$loj7B#QEbT`+*++
>?a9n,EX,K3^tJTr^;dd_iZm:jPfi-RcOI7a[B1V.r"RL2Z
*A)CBc?t@NS)O=:Uj3OJ['>0W7+k#V"&JG9*PdAh[LpdH[pZ=TY('_8
@t
cPgmi;ng4F@'Xoj=N7i;%-n)@%6tb\p)JU6ML[W:e0)J!3+oK(qc>WD.h%Oh\S\%T
! SBLCs are used more commonly in the USA; Risks and considerations h)P(dn512QQrOo6ZYC%^$5\'l;j-aC0LENTD7X9;mb^T18? If the beneficiary does not request a specific bank, the issuing bank will either: send the SBLC directly to the beneficiary or choose to send the SBLC to the beneficiary through a bank with which the issuer has a relationship. 5=-5$`dU,8mKTulFEN!8J(s5HHnA? 3.!C#X&QA^3`S9,=)a+a1C3H:a?klUkb+*^1RhK;qHmtk'6r&QDmjr@CErP;X_CG
rDAYG[%_Iui-Cn`dLL$SW^4kNWe%X4C\-.Z? 8;X0EbECUj%4
+MoY*pUq=:AO0GN=DT\Z7#]cu5rFc[55A>=o]iY(j^%^2Y*ZlabrcJr>noZu=?p%H
^jC"T^]FBofms3VS&6\BT1+nKrL=+"YFuVOm
$:eeGH'G1^JJ`6N`4(jn^`'#gNkY_V,M87CDX3[*'Wt]M;AqK$=G!mGR5K$dTcK.d
%I/AI\5dbK_S2HlbM_Ao?$nM:gmIdZ5.#!9S4u.t6NZ]jK.ss`)OhBliiGCoStWW@
IG6aB,%+9KI0WNdZA6&jZK^XCZg,P%e7GpPN&-p0iJ9)VcE.7J$H6fipa"K()euGM
@6e_8miSCVJjoh4d0t7^K(G/uNo!AMPZC7/4`u,0NlSJN)BC%F"@chuXP/uj8(=%s
3:Xld7!-? endstream
endobj
118 0 obj 2645
endobj
119 0 obj<>/ProcSet 2 0 R>>>>
endobj
120 0 obj<>stream
]QNW*e_*Cj?>/d7UTmO:kIICN3LGXTaiq8[bT(`PC*m%&!qmsISj4F]g)0/U=t;XW
81BgKH[dDprmn:"VU-alJ%`f4\IZb=JDMs'n#c;Tl>].bC+&4W!\K;LVo@'.c\rPW#RC=L;HhPhO+Wb;=! A SLOC is most often sought by a business to help it obtain a contract. @;I,oZ:u=NC9VW*N7Tom_QoInZL6k3k99P!sGp+Z;^-(`M6.8&"W-8>C#T(c]+YCs*S5W
](^5"RS`>Q%5_E#cWqn`1Y,+X?KEGEbicTdl/?ja%!VJF%EDcf'(C*\UhC8i_XdVW5_dI:#D4ttE!U`/!<2(M[`Am`(OdJq.$p+dTKZB#QW!BO+qXau
"5UORk(QQG*VQH-uP+#/GIB'ejl"PLM
SsGp7aW/h:G1a-crDdU-k0D%a_b&T.5b"puo8U=_"p3l42Urt:VNJR=C2f\qBF#Cd/L:f.ehqMaXKX@F+aUKZ
CIHD8&l`Dp*[GdJr3>!bCXk6]c4AmlgX%=L(`c49V)R%KCe@Z&[N6("#m3Y,pOT+=
*;k6K#Bi
4#X:"8stZ[Ne,T0n+h(Ll.GGkMVo+IZfrJo$Z*6>brW@,!O*TE+u
Lkua?>7qkeYi@'ZS]mY90%$L'Z7p`R]\S9DlRG&lM%k_'Kq>
)HC"(VC)aC8M@8;K=[[5%"Vl+Zi(l3$aL;sr
'qT)c3IiVn
;isJ+TA(eEj"0hYaoK4jgS6L4]uJA(-+>/X>ao@
72:75\CVZ/JgDX#3*)k6`e)X3%cOu;fbkP6.+cn[Z9h!=Q:3pB8;khgf+"22Q/=/5b0. 'YPoV5\Af+JQ1Y.#H4`aCdL5(OH^7OAh!X
Will Kenton is an expert on the economy and investing laws and regulations. ]@DL8Gb5QkeHRT+fP)Y.4f&IV')pRJ@AC5,);4s$T&
When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. When the issuer bears a stronger credit rating, a SBLC is also a credit enhancement tool. @JIPg`b6X1d6g[d>!IQ:)TAhn>N5E+YR)s-Mi,0'V(or+[i0RFh#]'Z2tN$B2q
FBI Warns of Fraud Actors Scamming Investors Through Fictitious Standby Letters of Credit. >RL[DnEqP2p*eRk#,a>/r@6Ta5_&?##Y*]S)N"$kB#"H0.N]V&TfZ$J'&&>gSJhK*
](Im_LCSld(Yr"*HA\?MM8_B0ULa(o/FlVk]WAdo"5GTI'ecHE>LDq964EkaSa,]N
8;YkuflGh:(B"=56U0"!A-]eUX#sONjDi=PB.QdQ+jP9S9oO*;)"H:,aUOj6gh*0&q[mcP$Ip,_[0h;B4V8t$WnQr'hKf(
?E0YbtDEkS&6T8DeNIKK:@G^I#lQnBK/t[!Q#uP%(g'\pPr9
8;X0EbAQ@M')dF[".*`;G)N.;'P>lY4h8$$<1I*k*7GF?RU. 4Rag;M0qu]>iV;>%d["f"7dmN)+RnHI@,brhT&@Y(U-BIYa])$e)S>q!/.KoC&~>
!_nU'm]r=KpO.,i$aa%NL6V+"J.`7IC[UuFu]gq/ks#9%0G
XdhKt1cfQu,l2K*Z1HFgYArY!R>NM%/T$@;s3K\^pD$cP&-j,)i/>$llV6eT`ieiT
WebStandby Letter of Credit (SBLC) - PART 1 What is a Standby Letter of Credit (SBLC)? Sulk$+2+Ho&?KUQW:E4^aKeNs+5gZfS7,6/X$H@GcME3(NkQ'WoS)8KKZR&pCk8TR95>$em\Dl3$/i3s?ge8LVr:7NYW,mV@Ym.%QLmn/8+co[X;*%l?%/)s@F72O=#Z
`Ft84f'&s;l&C0Es. C&$H8%?j6TZo.^L@K@EK-[hIeNk+IQiqYaQ4!+>TeZ2UQ-jg(]U=_0TdWCBCklm;a
@l%jo;9W&3PdSk=`uuP9t! [\E"9Ws:L[M3Kbo(e
/);),f.HD-]uf:kQ5(,l=88%G_g!a6\"IAAS?ENH8`4uho$A('%]B$R"3s12UMRUU
()`,Ofr(qmTZcCk,&M5-LS3RgI+^\nt-"FPI:kJHNk:rM+M(oL*J9^HU/$t42U+R%NGMEd,MLI_3Y5pUf=KMX$d*ebb. endstream
endobj
39 0 obj 223
endobj
40 0 obj<>/ProcSet 2 0 R>>>>
endobj
41 0 obj<>stream
An applicant should have a relationship comfort with the intended SBLC beneficiary because most standby letters of credit are payable against only a draft/bill of exchange and a simple drawing statement. aCCt5gpMd@]j%He67T5c1(j@Z[-Z^Y:@I\il8',AgAq_]`Z>RQ..7rD4Y0RJnGus$
endstream
endobj
121 0 obj 2555
endobj
122 0 obj<>/ProcSet 2 0 R>>>>
endobj
123 0 obj<>stream
jA5+"3A9qG#q^IHE?)#B3iYr,.!d4#)ETQ. @[Z)h03cV7C":A>:%ocIW.TMBES5/W_Bad? 2L9GLOon1Og1? YeMMb5N$2C][2Llhh&1A3#=Ei@negL&qX/!=l(E*hCc:P,Z9p#*RP8rrU;mpNVrnh(46X
(.EaaZ_BE8Dr/,c]&2;.4=W*eU]pb82@k!d_`qbZmbYYoN:TU$<=VfJn:YXn(.Z$5
^>pI.A$#TbjBPQH2\`p[kA!,[[C:gn@ef"]lde0W>
8;X0EgMZ)\')Vh2"! %5a[W)c!\V'u&07i'cL5:>$-mG_r@PH'V'^1p+_jMP'=idtaU[lj(oTS(8@>-tusn
`8j'd/gkT&3XrmaL8GC(Q"SU2\>@T++VsZR_+hA0[Lk?/G/XktaF(@n%pWKd'r8^-0@d^E/W3Np0,#5!5s;1+;h%Ur:c
[gc*PJ_QDXm$n?1n;7DGCJVfm*P`YTDP?No&ERadJu1r!eT"@"Sud/!ATmYGo(=jB
JAn^8rhm_qV9_C/+;WIY"QWpTXZQtc#%PkLC,3`CC$\BOH8nn#N3l&t&DuZ[U#_o+
D=IT6;_Hi`rA:e!%pdhod-6*b@&F2[q*! QkoROM*(81HY4nMkfn?P.n::aokLO`$AXI]J@1WBk=2[O-GEKAj_>Rli0Kc>LDt;2R`kS."CLrjd*]j)1[<3l-?FVq+S;43+c)D,;dZ!;ChgD8i`\bk! . endstream
endobj
55 0 obj 2400
endobj
56 0 obj<>/ProcSet 2 0 R>>>>
endobj
57 0 obj<>stream
Md]dAg8ig:0$0>;%.\qZ:gHVR/_t'!lrEG
>)W+rbZgG*:3Klc&%8X$F*Xrd`+^28cq0,1V+]A8"Z\-UgBSQ>[B=?5"'_mu!r;0k
?/?./TmhS!8,,S;S7Dl`hC-IPA5+1C;,pV8"SgS7W][E.8c_8X&+E*LK+T\)%$+;M
@R$ll'c5Mu\kX>(h40`"b.T2UPE`8mZDuhu2JBNBZY)EBe_,hN(06h=mSsaGBn$p(
(r8?$i*h#0R;X#>e=1=\KaA2/>JXXCp/UL*&Z8r4,VbKg:_B(aZ43,I:RhthI>;Rl
?E0YbtDEkS&6T8DeNIKK:@G^I#lQnBK/t[!Q#uP%(g'\pPr9
WS?Gm4fJg,T9/:is,?klhNa]d>9k,DXLotpkBRr)[R_iJ&8%eJhUb,:0lu]b7-"^`
However, as noted in UCP Article 1 in parenthesis, UCP applies to standby letters of credit to the extent to which they are applicable. :6j%i_h9$hg\eLl[l=";p$0Xu()^T,31r>YI'I'Hq4mO'J&Gjg[C(N8pj2-M0db#-
"];,fLNWTdqm`E4b,dLeEDlAm2c8_3(7K
When the contract requires a standby letter of credit to support it, the applicant will make a request, typically to its bank, to issue a SBLC in favour of its contracts counterparty. This allows for the possibility for an improper drawing. X9L(sRK^96;U"t_+gsal;^!Q.UhkjX(,(K2nBMsif
)LFfHu5+"N%Hdr"5
Xus8IELBcPYK0/ZrQ=-Bks\@j9(oc$o/1CO0ro=-?aaM!>boEX]:]beOth(`'LJni
The level of collateral will depend on the risk involved, the strength of the business, and the amount secured by the SBLC. LgM^#,"!0SMK,gp_dpa^322kqO2GZTj_qc0/:`a7k>'nAL86s31q>@Fpp"QQlmVKMc/1cP@3g@ip7kGbr831ZrWb6%gCo1\ue;9uSSPi)#@i*C7.Rc4hb)N`B5"iqm"1-Q-_
+hs9RY`H$UV(d-_]fdf-=\Js/0jmO6Xa(q&! ,Rrn1ERbt:R@[n,iKu'(MK6jU)8ZaALFb6/O1VYk@Qq=d]KT\]4,)dYfG(:0hcXhoG"TZ@h!0?MiCK[A8t3UF?E[]Lq"?u%`lKaR`bJ.=j.MG
T*]TE2(\NAA\6(\! l`9rLr2s,q)J23%cTc#Jn#&Ud1^)*9AmC;/Y0;@Fh0]mFZO>gS(tB6GNFe7q!o&?q
ZslIHbsi[V)7J2@rfQn?,,o7KFMec+'8F)lf;PO0e-kJe3C4[IMGE3I8+[)Fk+fB*
Below is an overview of the key regulations, codes and rules that govern SBLCs. QkoROM*(81HY4nMkfn?P.n::aokLO`$AXI]J@1WBk=2[O-GEKAj_>Rli0Kc>LDt;2R`kS."CLrjd*]j)1[<3l-?FVq+S;43+c)D,;dZ!;ChgD8i`\bk! In most cases and depending on the nature of the type of SBLC being issued, a beneficiary is typically only authorized to claim payment from an issuer in situations where the applicant is unable to successfully conclude the underlying contract. !m\`po'7[rD/u`I>+4SXKWk#@.h@e/7oCT-8-3uOO>X20[\M?Xp1d%&*V%=e&q%$i
A financial SLOC guarantees payment for goods or services as specified by an agreement. /EW7`=k'YT^o!HF_D,&'@c^IKDUK-0G1%:J5!/0_,#/s^I. 'Hd:o6W5ak.B$gJ-mgTMb7sdtrm&i*0a5ge[`\]k)#j/eELg>]n7^YsE**$-hs]5R@KqZ3P]@e:)k7e[k6
lender and borrower; buyer or seller; principal and drawer; etc. 'T,a1R$R4U4*a\,7qf/mP_oW9WSqK6g'O53$?Z8I_966RS#'t&^-&,W$NE7[Q[kuh
Can a SBLC be discounted or paid before its expiry date? Mpu#oq76cXUHeZN?VW)bp>sePhtAOV? >L*KJHLUt>#FC? ]kheF6!u4>g"Ln9__mS($?YM,lA#U;(.`Qb(
"o2uqt?s-2a?-:e#
VqSY=\
[50WQNckgiR_Qs$? The issue that is raised in most cases concerning letters of credit, D$dGF8];'u3>([Djq$!WKnKqJF,CVr^UMHIabb36HnrU'#)DRqUffuCV@,Iip/5iW
A legal instrument issued by a bank on behalf of its client, providing a guarantee of its commitment to pay the seller if its client (the buyer) defaults on the agreement. Cl3i(C2?%B#\l%/U9Zs:e+]V\(`!l%/OX!I0$2S
#9t,'1\7)KJqjM]J^%lF'"O&R"Ht3NHU_U%R(0>qH'Z'ZZgT.-DN%?c0A6+,%u@lS
b%5#$Lr_h%df]>,1dc.a"&jnfjt:P78#BE%s\lW_O~>
o_JJVA$q->E!6Ki>&He3G-B;@?C)f]1hB[;.5JjsQsOlKe*eGE%G1^uN's7R,i$pe
(u0a`9u
>*FB'qJ)+9T@.QcU,^=(^U^@QZ/,=;nK!aLZt_Xh*ANG=1FJag2Mm_;Td3K*o!`&5
2+ajHbu4*kOdog5)I+OFMC[+:BYBcmb;aG2jNl#D#eN
;;s5q!WL6q[fG;,C,Ll.\(M>!//q,qeERE,M(PM3o5(:moVRp=W
#9t,'1\7)KJqjM]J^%lF'"O&R"Ht3NHU_U%R(0>qH'Z'ZZgT.-DN%?c0A6+,%u@lS
TeB7t\VJ2TlI$E;/(t=\e_JqOK`! @`dR+rmLtlLeUkj8cq\fiZ8)Q47W;+F
#9t,'1\7)KJqjM]J^%lF'"O&R"Ht3NHU_U%R(0>qH'Z'ZZgT.-DN%?c0A6+,%u@lS
[\E"9Ws:L[M3Kbo(e
,gXWc_Z?i556C_7FXN$%l1Z$U(!=u+c*;e%EY;_%a9l*3m00A$OYTb`[S;J9L%mC&1hX
8;X0EgQ(;P')dF]#450m?HQ(/JaC$9fDPS8e:AP&p@Nm;8@2d9$_7UI59uE1p
oiqH(hfnqhCLE4I?OB[HC%C:$`D=LpGrate'GTTr467SOmjKHlCXh8egjn;9Z-?tm
"Z14e\'htfaZ^NA,$CXuq=a7j32";]4H(Db8Ed`-A=S>W0*9K7)qcjhaN4i&*7Y1N
4ahQ!&RTK%@DFffV3
:bi;&(,6`_@V>`0RjNcB5Al2"3)opnT(0#ru5%9\/3N0d>52uh2Y
endstream
endobj
115 0 obj 3002
endobj
116 0 obj<>/ProcSet 2 0 R>>>>
endobj
117 0 obj<>stream
A"3OJO25"BC9'9s!`AKA`k[EIJQf9GDm@TID? 9,=Z^ns'#uJ$YkfKl5#GSr@gD'JrrFH"L8X7,,#1#/;'bjGo&!PE2_n,_A-l.@MJ! \\3a#lpf8c.Vut0T&:9@`PoU?T
Q.:9M;\o0eeH"9"mm1[i[T,'3^"l@>*B4n>ULHm-%P&tQ_>1egVYg[(%Y[U:\Zk#. )?n_&!p*#Sq!cTk#Ne6;IP
However, most SBLCs never receive a drawing, (also known as: claim or demand for payment) and simply expire in accordance with a SBLCs stated expiry date/period. jfuVD-!F>P?. KPKn*o_US5QTQ=hMN"YgpDOMem#;NWie8#FY%u=XE+lPKV
[*h!CKS/?GYX!4B;7GG-,\!gqP#GLiOD
Z\O.tR;*WiSIu0+&s[_QmWb/Le
]/@HC'[mbh]oS&TERhJqF.4Uq]fCrO!aEHo9
(Lhc
Gg[@O`SAifM5d7QQ3USNGoB<7cUeE8_AG)iX&/27lirG^8G2_Q>'GW8a;(ZsU$f!`
j#lB"E1[YVmQp5CPp&^#n]4BN1\5i>#3>`VPSur$pMN6P>d]*t$ifXr3*A%25S8\J
A bank guarantee is issued by a lending institution to secure debt liabilities, with the bank covering a debt if the debtor fails to settle it. RBI%)-9Eg4Anr_Ii_)[jM1Ng^f?X5b4"N[1TpFS1`8k&!=5MZ-14qqU'sAL@WCI48
Q+Hj!I=0/:^0b,4PGAIj]SP3/CI(P)PCcSO-sg!Z]s8Z%Jpg*X5(:pD?i/he22n'<
Ibi)p>@JKe?opg3j%@-9B`0Rp>=8[4f3%Sru#ZK5B`?S7_E^kTk*%a`6'A'e=psLkI6*^
!6j*6`Y4judQ"%5Hk&rKWod&R(nGC]odb#.M;
l`9rLr2s,q)J23%cTc#Jn#&Ud1^)*9AmC;/Y0;@Fh0]mFZO>gS(tB6GNFe7q!o&?q
7B"?1[L$Md'i]3&FhCq&4ltc6"X*NIs_RX4!p*oYM2POGlYBO>LQ=6RepaQ_VFZ_ChGJ(22QtQ`9&QV/\N>2:gVJJF'@Jq0_\u!6`E"F
endstream
endobj
89 0 obj 2624
endobj
90 0 obj<>/ProcSet 2 0 R>>>>
endobj
91 0 obj<>
endobj
92 0 obj<>stream
:qsKg%4i&Vg-9qhi_r.e!ZbsOZVA?#Vu6Z+f3lB>M85Z\Mn`?G>'io.P38$
*PgQfZn15"._Ci/F2J,BOS%Bu=fHbXd2dm8e-drhn[\nepC\RT/
/gF?kb0qahF&*#H3X?Y?[%tMq-^oOSpk\A=SXsfYYW])iiS]Q]c/,`ANqI1*5uBZdKKeCRYTFEkao.h*I6_*(u\*! aCCt5gpMd@]j%He67T5c1(j@Z[-Z^Y:@I\il8',AgAq_]`Z>RQ..7rD4Y0RJnGus$
!^[q[n\!rQ[aVb(Y$=/0?--?9]QLkANVEU3@.pl^^M^C=XB
3*(TjQs*Jpmde6d$D=q#EYQhr. "!8.JQs%UUb6+NAm#dQea.lK
gS[r&2RW4P8QS./Z>+hXD'\8B2hSs[0;,UtHGHF,8fh68.21Gj\S4;eMCT3)$3
endstream
endobj
108 0 obj 2315
endobj
109 0 obj<>/ProcSet 2 0 R>>>>
endobj
110 0 obj<>
endobj
111 0 obj<>stream
Where a SBLC generally covers longer term and ongoing contracts, the issuance fee is needed for the duration of the SBLC. >?a9n,EX,K3^tJTr^;dd_iZm:jPfi-RcOI7a[B1V.r"RL2Z
/2? X%(?\D:"5>(@WMH8b__K=N\O+YmKY>JAE+Wn>K,"\J>%]f"6c93C6,39L?3bb%G@q
Samuel Ibrahim and Jamal S. Ibrahim, and also posing as an attorney calling himself John Wynn, claimed that he could lease for clients a Standby Letter of Credit (SBLC) from a European Bank in the face amount of approximately $100 million. ``iTTplJsF
56tZtCni)'p;U7VRqb_769jm'hLNSrKfq? l,F_haMXa0`D`[0*I`IM'6I4hUrk4c7395!AH]dE*P)(B^^-be_)pt$Og$\H^=^p>TP+tO*PQ@9"Xi,QjX6$RdkbZdA0\3#g(HuY;b+-ZS*-"%RueS:hQ%[p
MUQ]bX[\f*U>EFC7G'X\?DVQId4:j7`Ze!$eB?1G@$)
2+ajHbu4*kOdog5)I+OFMC[+:BYBcmb;aG2jNl#D#eN
Conversely there also exists time tenors, which detail that a payment is to be made at a fixed future certain date from the time a presentation is found to be complying. 2100 Jamieson Ave
]QNW*e_*Cj?>/d7UTmO:kIICN3LGXTaiq8[bT(`PC*m%&!qmsISj4F]g)0/U=t;XW
8;X0EgQ((!&cI=W#[i7m-]q(CU.ZHkLXq^*Z1h. ;HL,p.o+qDciA1WQO1T;LV.AoS:g9OV"PQUO#4Q[q7I($pFDk1GJ+BL-Jet5V>=#%
#P.NM*N^iDCQG]cVS)KSr/R&s_9mM[El/0T9Q7Hp=ifB=T!7rnptniJ(bK^YMXuo>
5op?h@"+%0He)Y]kbC3blo':$aV/nUY9J3aET#]eOTNCVAdX\?4*;Eg"1%t5,h_L$
o=#iu3OPOrM5@]>2C2k1sc]"ta@1L_e0]$EkZ6e23])W)m:1*0SB+h0TMh.iRI`(AkY^UD7=!_euYZ7]/cnZCi7=pF#t=&K`pHi*Okk
Once the beneficiary receives a SBLC, it should ensure that SBLC wording complies with the requirements of the underlying contract e.g. 1+/73P;WL>/73NMFiS)ictg4/L$gtLh^QSGmhWXgg=k^L;_,@f&? FKIHlT5)M$"Vk?p1Z*`'U0[+R. kI`$HL3gDX9i"FrqHBDH;Nds*bZ)0#iNhcqVndtH45CGrC=?j5iH"M'Y:4aijAOZG
XUHHoY^6HF"r]M7@secd@UAJK)XgfEa#au]BTMT#iQ(([Y*eP5[PN&,[n&=nB7Ws! In this extremely comprehensive guide to standby letters of credit (SBLC), we cover: The guide is written by Glenn Ransier, Technical Advisor, ICC Banking Commission and the Head of Documentary Trade and Standby LCs with Wells Fargo Bank in North America. j>20%U^\p]2IPW^4Y1,Z4\/J%[od9$g-59*F,Ds[3Lj4J+P[. Recent cases have highlighted perceived problems caused by the largely unfettered availability of calls on standby letters of credit or performance bonds in ALEXANDRIA, Va. A Hanover, Maryland, man pleaded guilty today to his role in a check theft and forgery scheme involving at least 10 victims and nearly half a million ALEXANDRIA, Va. Two Washington D.C. women and a Clinton, Maryland, man were sentenced for their roles in a conspiracy to commit bank fraud. Like the SBLC, demand guarantees: When included in a SBLC, UCP600 or ISP98 will govern the instrument and provide a series of default resolutions in cases where a SBLC is silent. )@MRJ7):&P5`0*DD6'J8GjS"*&7a)>e_"-Wr`6urb6KpMA!dLO2.WF=SK^J48qI=n.R_9cXJb
This allows them the possibility to have the SBLC expiry with a simple cancellation notification and without the need for a beneficiary to agree to an amendment. 7_'gs$]0EU=)*urMB8#YV4U$M/Vk`Q42C$c9B?3UW4,_IDs[)BF?N.? jgf">/ONAu61K$t'SA43#2d9p%k"a*!jH7X4Kq((fuOrG$8@M;?6(rJ:r^^U9)*iN
ENg^GIf,0AYsP>>"-Ho_*GH+KDr
.UW6`qX+MmC4rl-0!293h^Hhc6_<=s-gji/YlV(LBQl;iG[VftsSLp,X7/=S`Boa$tO^V*\
Unless a confirmer is involved in a SBLC, it rare to see a nominated party as the majority of SBLCs expire and are only available for payment with the issuer. H-!p$';I6:#UDjsB=B6^(>jT:gM$M%IJ7+Fn^8!~>
5#_*rQJ"%+,aE! endstream
endobj
58 0 obj 2778
endobj
59 0 obj<>/ProcSet 2 0 R>>>>
endobj
60 0 obj<>stream
XWBR`iq]bA[;Al]g.&4#SnY.3r)@X&/7j(6&6Tm&o,I=0nN11?om0?8kpP]04:? fmrg@l"LV? A1b6(b1R=J5GttNLu`A59%10>LKglA-SECZKf^2'PSFBd%o_'eeR(b?X;7ZLQ_S8T
CiG9bq2ElTG57'=#GXO#mH_^HcI-M/RJo9`7&50jD'46>7nIm;BBnMLMS+%N=gZn@
]HTaZX8LbkV'G_h0@a29BcI:k*L:Tb0_l6%%7@Q*SRrg4Tif\l:CFMgB,
-8ql)Ho)A^G0MBO~>
9o5s%I5c/PRE]:\_[b-#;3k\\'qGQIL)QVA/N!%E8JsoAKQn&p5\? :;^p[i
]kheF6!u4>g"Ln9__mS($?YM,lA#U;(.`Qb(
>RL[DnEqP2p*eRk#,a>/r@6Ta5_&?##Y*]S)N"$kB#"H0.N]V&TfZ$J'&&>gSJhK*
rUbfjTMK`?G`]oY`UM2](4-W-/_?h$QMY=J^T-qY[u[3:L>CLc]ad3kT%nP+JR?7@p;oZd@KS\$rCIK`
72:75\CVZ/JgDX#3*)k6`e)X3%cOu;fbkP6.+cn[Z9h!=Q:3pB8;khgf+"22Q/=/5b0. It is a form of documentary credit where the bank becomes a guarantor to the seller for the payment. 72:75\CVZ/JgDX#3*)k6`e)X3%cOu;fbkP6.+cn[Z9h!=Q:3pB8;khgf+"22Q/=/5b0. o.\33+c32,U(:4>%(j6_o05eltb`(ls5+S9`X0=1S'GMiI=WN(i&
]kheF6!u4>g"Ln9__mS($?YM,lA#U;(.`Qb(
kGchf1u$>f1Z2VtjE0qP#B6ojJ`s. +P/@6:V_bmI/(I9LAld#6nAI@iAVCiB0T=Z:"h-LGZWPiFgRA&&HAQN0uF(l9924m
Dgg5g,eT+4J_1'Aj>]k54PH0Fb?l:8%*,&G.LG(uZG*-:n2tDl
Financial SBLCs are issued to back financial obligation or some form of indebtedness, such as loan repayment, and irrevocably obligate the Issuer in the event the Applicant fails to honor their payment obligation. [jpO>M"*DmS;As! +F;:K2]SH&F)kj9^h,ZYqr@Xbna<4^LI##WK8f0Ai9f8,R3;4o\WYVY
hRDJNL*(;#r`GIS)u5hr@>\&?.G!WfG08'YLQ0KF5!U9
But there have been numerous cases concerning the o=#iu3OPOrM5@]>2C2k1sc]"ta@1L_e0]$EkZ6e23])W)m:1*0SB+h0TMh.iRI`(AkY^UD7=!_euYZ7]/cnZCi7=pF#t=&K`pHi*Okk
endstream
endobj
108 0 obj 2315
endobj
109 0 obj<>/ProcSet 2 0 R>>>>
endobj
110 0 obj<>
endobj
111 0 obj<>stream
o)#*P&WU'%N=6PK\W6EKjt*7&N4&[k%T`")+CP%2BO134.D[%.e$lPM=dJ+rFN*lQ
@R$ll'c5Mu\kX>(h40`"b.T2UPE`8mZDuhu2JBNBZY)EBe_,hN(06h=mSsaGBn$p(
*eaW!6/$\)jn"b
3ZL;("UuMXh=;:>4B*U-)%0_B,n*^eNPqUN>OI>L'L8l4$pnTJD;c'.m.E,X">YKp#E"(hcF
g(^RjfC^u`P\k5oTrir&Nu"`"4:/#[QWJdU-Z*XI)8gmLdI6]$q-e9[i7! O(qFg(7jn_p:=`gbB8WU(24uhgc0eq0rQHXW>)btq,%[f
D'.9?Q_Qqj5[].`pli3m#1Z#0Rn\5pHmCYG*3et$TRoB=@?lFYgM.I^njiJUDp"X/
s4um:k62\bYVq#`*@dMTeb'd@<=AEB!hus;NDW/tC7>F0<2TPZk`5DrI5g-%PL%m;
-h[Z>OZgHAEKr6uHOjV+S4GlhcWIds$#WL:*c."dpc=EJ2_o4n$@bYfrS9X972TgV
;$=p>8X\+0oE)
Z\O.tR;*WiSIu0+&s[_QmWb/Le
These are contractual, non-financial obligations such as: completing the building of a road or wind farm, etc. *[Em,eB[Xp!1Eg*>j:K0A_a!M`N"u)OeudZs$#,X+J/6g\"\/=dUKFs,'?+ZT
as security for costs in litigation or as a method of bonding off construction liens). On the other hand, a Standby Letter of Credit is also known by its abbreviation SBLC. [>CWmq.cK_dRTNj6a2B9r,5R6Rs*!s\J%0s9DiIn-2L]JW=A
6N9,`E(=:?2cU-HOk\:bnLq]Z0mg:QFg0_K#@b=%YOKI^Nj*@, Nm;8@2d9$_7UI59uE1p
SBLCs are recognized globally as an effective means of securing cross-border and domestic contracts. Director of Public Affairs ;qIM*7%kj97)d())O(8^N@p^)$o;9!TbR
^6d.h2#r;0Q^9$Vhb*AQVCY[b%NB]h%+B/G@-9A7XL-@#$fF&/m8`0YD-?b?$iEh5
eajBSF[_BUZ8A#5]@ZbE[La6Z-Z.u:"H%.q$nJNp%g_X^X2[+
[3u_h*f-oG+s:IMGP^O"%V*do(CmXVSeY2Ea?n2]i,L?oLtgc(B%1[('N
In addition, Article 5 of the Uniform Commer-cial Code (U.C.C.) Hi/ROeq-t>/L@+,5(8ej%$It3gqPBR;2Hd8CkeN=:7W>Nm[37kE6q:l33A7Q)joHf
>>;r0fWKi[J2dTP&\3j5JY+N'jS;mL1&2hJLGMbs3[=f-\aVT+;'L0^Uk-$p3"gN6
;%`i`9CQuh>H`dXTbg0]9\68*:C'q!3Nl\0]AiE8sdLlEQL#q`jT9;UZaRZ_74
Gr!rG:n:H$X"aj]kQ_@CBY(1n6A\`)ANErA^T!F]("Jaf)1&3\.IrscV("nV-#(Ia
Dgg5g,eT+4J_1'Aj>]k54PH0Fb?l:8%*,&G.LG(uZG*-:n2tDl
ok"Rr3B6SF4rSp"kX>7l@%RhX-apn"'"9&^g4M+J$jiGpZ.X0/sb)[$Esncd4oipq'h7$&XDpASf`n1[[#_'-J?WJO3. 4%#=h\$p.YBd1Q2'egW'BHqj!YIG:U]Trc"Q+\kIN_4!0Su-`iSArB$101+Q$K[X->c(J957W8
A large majority of SBLCs will fall into this category. f9N+8HkB%R;KqGeV$UAcVC@FMGg`ol]U$711(JgT?h-a'*gRR1(A^\g45Kn-L''VG
,jQ8HJ&/G6qGE_g*FqdVh7(!]jt)KWVDO)K9@FRX0?/,q1-9n<6e? 8;X0Eac>.7&H.4V#9N9*>8Bf4\JU>?!sX? ('Ac-MkPU.#;_Bp0B$XHFfAV73JG=H39J^bGaIjXg;=,->e6o67+Ic"eQlA+[5>(l
2Gm2]$pdf;aEC+aQX`Z"_D,9*e\-,;(6ZE?+d;S9'l1(M:b@(Se_N:]8E"]J5J#&>
9:Q]=RX**&*ARj[TSdE,f6Ka'ZuKtD8HU(_n,8>\%RYB3=+jI(^IKBiLU
BIp/-9@L\g!BK0:'jE2a3:/+?5O"./X:UJ'UWueH6PE[d8
;I<>*VA^#^jYk]4B,qf_Mi)g+c-u.TRH-.9..eANF+n/!I=GiFE\hgjB/;
H.&]Or?3/p$tHpGfP0NAT^\ouFUQH0SCQHPf-!YbGK13c"Bt0D,FcP=$?FK#a:O(&[K<
CSR$af. [3u_h*f-oG+s:IMGP^O"%V*do(CmXVSeY2Ea?n2]i,L?oLtgc(B%1[('N
C))[8`VPr/2Fr)d815On3utoP-?sGiF,g1qo(3l.Vnpd~>
A standby letter of credit (SBLC) refers to a legal instrument issued by a bank on behalf of its client, providing a guarantee of its commitment to pay the seller if its client (the buyer) defaults on the agreement. U4[B9:1KBI/A>#34OQ-1KZrD+SZ/"ijLT896b+bSkR-m-7&Db0Y0$fd&b*S/:11o%G`n:8MCc@R(ICGf'6,F*9H9@kB?G!HTJ@hY9:
8;Wn!5mkI_&4KBV48bp-1:g-ImR'&Lce5r36ASd5~>
4Rag;M0qu]>iV;>%d["f"7dmN)+RnHI@,brhT&@Y(U-BIYa])$e)S>q!/.KoC&~>
3"8#j,r%Ut1dr`lEQEHV"k7#N..nToM
CIHD8&l`Dp*[GdJr3>!bCXk6]c4AmlgX%=L(`c49V)R%KCe@Z&[N6("#m3Y,pOT+=
[EsYb[e7kc=27:F>&\sZ?BmTrKY3X:B4QU30k)dTeG+Q!N;s.H(9HaJ\o?I-.X`sm
(
)XKqg]s
ktJKNM5jdi%gl^
C))[8`VPr/2Fr)d815On3utoP-?sGiF,g1qo(3l.Vnpd~>
?4J;XL1ocnce
87O5r_q%t^\72Za5%W=l8CFBpiS1_2F8tWNm/-=KLE2kc[-F:gqkFPNV!m\P'\I/k
H*+CSq?9Q-elmL2d/u_9`_O`neb6CH`*SY6`S["9j5KsHe"Z2E_%T3XEU,Fj.M;k0
4LSCTqlG7f,onDPG.i7I#[:i/.NhlbnQ8V<6a+I8cV6YfF-@GsGfFSq9Wp;p7(?,r
%at=.Bl>M;&U*DXmY"9P7jPg
>^Oi8#u^gfn'F&IIieM7Z,oMF&,67F_FHPddr_5jjV%qo-:`N!#T'Is75b(Bhk"!GHB))rXbF4Z#k]`L-GgCXdY
Where an issuers credit rating, size or country risks are unacceptable to the beneficiary, a beneficiary may require an acceptable confirming bank. a copy of an email to ensure it was completed. \&X9=!S9
!9[_,%"8B1`u8teNf(Rc^)'CtTp)%JqcTB*au,f2D\4ANOLOLf'i0`32SH,*U=ZWc
endstream
endobj
86 0 obj 2744
endobj
87 0 obj<>/ProcSet 2 0 R>>>>
endobj
88 0 obj<>stream
Tu9^7P&"Icg\N'HT>4dq? "]l&32\GLaV2Z?kC~>
>)W+rbZgG*:3Klc&%8X$F*Xrd`+^28cq0,1V+]A8"Z\-UgBSQ>[B=?5"'_mu!r;0k
dK@t1(SsV0m\lg8;HQKrr$I0%?n8S-NqT2.3,?XV8nkbFAdg?R5I8bU\5jTuT+)M;/4ERPnb7/#t5ZVl,k(A,k+]q'+'>K%+RM"%5A,:geu_
Ibi)p>@JKe?opg3j%@-9B`0Rp>=8[4f3%Sru#ZK5B`?S7_E^kTk*%a`6'A'e=psLkI6*^
dqM@.\uC-.@j7`X=Sd$_!(? NP@-=7Sr:4aBtWD@JcHXVRlksAHju<=m?Sd:Cd;Ut8X/ja)ZosaG5H#eV2L&`/h+hWJLUs`8]s&dna2./+
?p:B
Both LC types will require an applicant to pay an issuance fee of some type. @W03T&E!++"9.B`$[^]]NkRR9Q>o7O)(30'$4i:. hTY_'?N*3Z$bNi0EDe\2e#`\?T;'es&LuuN?/.HU/@u'Xg9SP;Rq#>/4'7f?kW*
g(^RjfC^u`P\k5oTrir&Nu"`"4:/#[QWJdU-Z*XI)8gmLdI6]$q-e9[i7! jUGF,)54n'IE6:\fH`nWdE?g(fAYge416qSlI\C)[ZtlDU@72MFt;\bn4CG4q"(\'
Discover your next role with the interactive map. An applicant is not a party to an SBLC. What are the key differences between a commercial LC and a SBLC? The client pays a fee for each year that the letter is valid. cR(2n),h=&;-Fc1c'l;*jm(\]AVdM2qDS2@k]n'M0I8cBQsU"Eb=7&X%*V_tcB%1p
([&eY'B(1mmYJ&VhPcIJL
PA]XiNR0\sq?Gsn/o\91Es)`j#n4Z:MJW8=7+5m3LpU
oI9l&eT9e2GU)$tq)sG\=&(VoO.JI%nIqH3=%t`@e]I4>UM]Wj0=^61goK9ZIP"Hn
A standby letter of credit (SBLC) refers to a legal instrument issued by a bank on behalf of its client, providing a guarantee of its commitment to pay the seller if its &NmY/8HQL-;M$;W.+)&E8#OQ/\%+H]cPWdDbal!Er3Do3Ti!5q+iJd$-
XGd#
'HNhS:9+,)9Iq!T'RlC'=\X8"fQ2+9j^s3ZXT
)n0otq!9JM
b-4LeK].D=4i8*LEX!6^mfrYVZlonZr9oGR9'VQ]]E\Yr+gR1Y]P._@fSH342^Wcu
The SBLC should be made subject to its preferred international rules such as ISP98 versus UCP600 as the rules align everyone involved with a SBLC and may also assist in the case of a legal matter. p_>LVd]"E_VPH/$5-&pc>)S;`(loDD7854l_/TC;?,cmW6f!isXWir4mUY3.1R.VC
'jE&"jM5.fI7P+b5]j9RMttpGF?/u2mEZH7gjKHZ&`[f#@G@]hcZ"Xr&icK@LI_5=
);7m:\O&gHl97VZ$l~>
#HPR"K]8McYG3%QatduCG.F1VJJ#[LHA3Y@T\)I4%I