Lesson check0 / 2 answered · 0 correct
Check 1
Which rules were designed specifically for standby letters of credit?
Check 2
Can an SBLC be subject to UCP 600 if it expressly says so?
ISP98, UCP 600 and the Rules Around a Standby
Understand the rules without becoming a lawyer.
ISP98
International Standby Practices 1998, commonly called ISP98, is an ICC rule set designed specifically for standby letters of credit.
A standby becomes subject to ISP98 by express reference to those rules.
UCP 600
Some standbys are expressly issued subject to UCP 600 instead.
UCP 600 is best known for documentary commercial credits, so a beginner should not assume its standby treatment is identical to ISP98.
URDG 758
URDG 758 is an ICC rule set designed for demand guarantees.
It is useful to understand because MT760 covers both demand guarantees and standby letters of credit, but do not call every MT760 an SBLC.
Applicable law
Banking rules do not replace applicable law.
Issues such as fraud, sanctions, capacity, enforcement and jurisdiction can depend on law and regulation.
What to check
In MT760, field 40C shows the stated rules.
Read the rules and the undertaking wording together.
Remember thisISP98 is designed for standbys, but the instrument must tell you which rules actually apply.
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