What guidelines normally govern standby letters of credit? What are the main problems in this connection in practice?
In practice, standby letters of credit are generally subject to the same ICC guidelines as documentary credits, namely the Uniform Customs and Practice for Documentary Credits, ICC publication no. 600 (UCP 600). As such, as with documentary credits, the provisions of Articles 18 (invoice), 19-27 (transport documents), 28 (insurance) and 14 (presentation period) in particular apply. The application of Article 14 means that documents comprising of originals of transport documents must be presented no later than 21 days after the date of shipment, even if the documents are presented before the date on which the standby letter of credit expires. Should the standby L/C (UCP 600) require an original of a shipping document in addition to the actual drawing document (default declaration), Article 14 should, therefore, be opted out.
