Letters of Credit & Guarantees

Purchase - A Drafter's Notes to URDG 758
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Learn more about URDG 758
Both the ICC Banking Commission and the Commercial Law and Practice Commission have overwhelmingly approved the Uniform Rules for Demand Guarantees from its current Revision URDG 458 to its new Revision 758 (URDG 758).  The new rules will enter into effect on July 1, 2010.  Are you ready? 

Learn more by clicking the Tab:
"Purchase - A Drafter's Notes to URDG 758".


Shipment Disclosure
I’m excited to let you know that BAFT has published a document titled: The Oil and Gas Industry: A Practical Guide to Independent Undertakings.  This educational document reviews common terms specific to the oil and gas industries (Industry)and which are routinely found in the LCs and Demand Guarantees (collectively Undertakings) which support the Industry’s sales.   I had the privilege to Chair the Global Working Group which dedicated 3 years to the production of this informative,  educational document. 
BAFT has recognized that while the Industry regularly utilizes Undertakings, little has been done to harmonize or qualify the specific terms and document types endemic to the Industry.  Interested in learning more about such topics as: Escalation and De-escalation pricing, Reduction and/or Due Date clauses, etc.? Want to review documents not mentioned in the various rule sets (UCP, ISP and URDG) which often govern Undertakings, e.g.: Pipeline Certificates, Book transfers, Meter Tickets, & LOI’s, etc.?  If yes, then you should find this an invaluable educational document. See how your policies and procedures compare with the this document’s “Best Practices”. Interested to learn more?  BAFT members can download this document by signing on to BAFT’s website: http://www.baft.org/
Non-Members can obtain a copy for a nominal fee.  Click here: http://baft.org/ProductCatalog/Product?ID=3012901  

2010.04.01 | 2010.02.01

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This site is dedicated to providing technical knowledge, training, education and solutions to anyone involved in Letters of Credit and/or Demand Guarantee transactions. It is maintained by a trade professional with extensive trade finance knowledge. By unraveling the puzzles and misconceptions associated with these instruments, trade can improve and expand for the benefit of everyone globally.     

Note: Although I refer to applicable laws and legal concepts and/or actual legal cases, I am not a legal professional.  The information in this site should not be construed as legal advice.  Persons seeking legal advice should consult their own legal professional.

In Shakespeare’s, The Merchant of Venice, Antonio provides Bassanio with a Letter of Credit. This piece was purportedly written in the late 1500’s but Letters of Credit were by then already an established means of facilitating business. They continue to play an important role in the global economy and the U.S. marketplace. The majority of Letters of Credit (“LCs”) and Demand Guarantees (collectively hereinafter referred to as “instruments”) issued worldwide are “documentary” and “irrevocable” commitments of the issuer and so this site is dedicated to this type of instrument.  It is possible to induce an issuer to establish a “revocable” instrument but globally this is very uncommon.  Additionally, while this site does provide an overview for non-demand types of Guarantees, these types of instruments are generally subject to local customs and laws and, as such, this site does not provide an in depth analysis of these contracts.  

Free Trade Finance Assistance!

Send your questions, comments or ideas to glennransier@loc.cc. For issues that are of particular interest to the trade community, I may publish (with your permission) your questions along with my responses on this web site.

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