Letters of Credit

VIDEO: Learn more about the letter of credit and the rules governing its use in this four-part interview series with Pradeep Taneja of ICC Bahrain. Includes: tips and explanations of the UCP 600 and the evolution of the rules.

ESG is certainly not a new development, but its growth and importance in financial services have never been higher. Whilst there has been a big focus on the “E” in ESG, we’re also seeing a lot of progress in tackling other aspects, such as social action to address societal challenges. One of the biggest social challenges in global trade is the huge, and growing, finance gap.

The Court of Appeal in England has decided in MUR Shipping BV v. RTI Ltd [2022] EWCA Civ 1406 (27 October 2022) that sometimes a party must accept payment in Euros, even though the contract expressly stipulated payment to be made in US Dollars. Although the case is not about independent undertakings, DCW readers might ask if the decision could have implications for letters of credit and demand guarantees.

Persistent structural gaps within and between the world’s economies will decisively influence trade in the years ahead. This was one of the key findings in the latest Future of Trade report.

In order to communicate with each other, banks use a messaging system called SWIFT (Society for Worldwide Interbank Financial Telecommunication), which provides a standardized and secure way to exchange information. There are several different types of SWIFT messages that banks use for various purposes.

TFG interviewed ITFA and ADB about the financing of dirty commodities and fossil fuels, and what a sustainable transition means for trade finance.

Your Monday morning coffee briefing from TFG, 27 February 2023

Trade and export finance expert Domenico Del Sorbo’s take on how to prepare the “draft” in accordance with the letter of credit conditions and provisions.

Your Monday morning coffee briefing from TFG, 20 February 2023

UCP 600 article 2 states that a “Complying Presentation means a presentation that is in accordance with the terms and conditions of the credit, the applicable provisions of these rules and international standard banking practice.”

Though an important instrument in international trade, letters of credit are complex, and their definition can cause confusion….

Following the latest Q3 2022 edition of its quarterly letter of credit (LC) statistics for US banks, Documentary Credit World (DCW) has released its analysis of LC issuance from banks in the country.

The shift to a more digital form of globalisation changes who is participating, how business is done across borders, and where the economic benefits are flowing. This creates a new paradigm where not only large corporates, but also retailers, SMEs, and individuals can use international payments, integrated commerce, or trade interfaces regularly.

This article was originally published on December 19 2022 by Watson Farley & Williams LLP. TFG would like to thank Kimarie Cheang and Chengxi Tan for their contribution.

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