- Anti Money Laundering
- automatic extension
- bill of lading
- Counter Terrorist Financing
- financial crime
- Financial Guarantee
- Independent Guarantee
- LC Law
- Red Flags
- Standby LC
- Trade Based Financial Crime Compliance
- tranport documents
- wrongful dishonor
Ongoing Topics at the IIBLP Trade Finance Events
The 2018 IIBLP Trade Finance events series is halfway through. With events so far in North America, Dubai, Belgium, and Stockholm, we've seen a myriad of topics discussed in the sphere of LCs, demand guarantees, and trade finance writ large. Still to come are the events in Hong Kong, Singapore and New York. The upcoming Annual Surveys of LC Law & Practice, Guarantee & Standby Forums, and LC Law Summits will build upon topics discussed thus far, bringing global and interdisciplinary points of view. Some of the issues addressed so far include:
Sanctions Instability Matched Only by Clauses
As sanctions by various governmental entities are applied, rescinded, modified, or otherwise maintained, are sanctions clauses seen in LC applications getting even harder to deal with and decipher? One clause spotted by IIBLP contains the following wording:
I/We represent and warrant that neither I/we nor any party to this Letter of Credit or any other trade transaction/s financed or to be financed by you, nor the country of origin or dispatch or trans-shipment of any goods relating to a trade transaction/s is subject to any economic or trade sanctions laws or other restrictions by [specific jurisdictions], or any other jurisdiction to which I/we are subject. …
This segment of the clause (yes, there’s even more to it) raises a host of concerns. Interpreting only that portion in bold, would LC applicant’s acceptance of this clause for one LC issuance carry over to any subsequent LCs issued on its behalf by this bank?
Why Sight Drafts Survive
At IIBLP’s Guarantee & Standby Forum in Antwerp (20 April, 2018), European bankers asked why American bankers so often insist on presentation of sight drafts. The best answer? It’s simply tradition. Banks asking for sight drafts don’t give it much thought. In spite of frequent calls they be purged from practice, their use continues. If a bank wants a draft, then it should provide a template that’s to be used that’s as user-friendly as possible.
Unusual Bills of Lading
In So Sau Lai Connie v. DBS Bank (Hong Kong), although a bill of lading may contain atypical positioning of certain fields and unusual numbering, there is no prohibition against this formatting. The court considered testimony from expert witnesses from both sides, ultimately favoring the view taken by the Issuer’s expert witness that raise discrepancies with the B/L presented would have required specialized knowledge of the “trade practice” of shipping that a document checker would not ordinarily possess.
Additional Topics to Be Addressed
We have mentioned but a few of the LC and standby/guarantee topics to be addressed at upcoming IIBLP trade finance events. Click Here to view the IIBLP Event Calendar. Additional topics include:
Digitisation and the Future of LCs:
- TT Reimbursement
- Calculation of maturity date: TA 871 (Nov. 2017)
- Tolerance and total: TA875 (Nov. 2017)
- Government required certificate of origin: TA864 (Nov. 2017)
- Short shipment in 8 containers: TA869 (April 2017)
Trade Based Financial Crime Compliance:
- TBFCC Certification: What you should know
- BAFT’s TBML Report & Wolfsberg Group Paper:
- Correspondent Banks: Reviewed
- What documents matter?
- What are customers doing to Circumvent Compliance?
- False B/Ls issued by NVOCCs
- What tools are banks using?
Pitfalls and Predicaments in Guarantee & Standby Practice
- Meaningless Guarantee Wording & Motivations for Using It
- Banker’s Question: Should we attach Bank’s transfer form as an exhibit to the bank guarantee/standby?
When Should an Injunction be Granted?
- Lessons Emerging from 6 Cases Ranging from Sane to Beyond Crazy!
- To Whom Notices are directed and how sent and risks of deviation
- Issues in Drafting a Commercial Standby/Independent Guarantee - from the perspective of the beneficiary and the applicant
- Independent Guarantees/Standbys used in legal proceedings