Learn how to draft letters of credit and avoid problems when drawing upon them for payment.
This presentation will walk you through the steps in the life of a letter of credit, identifying pitfalls along the way. The topic will review and illustrate fundamental principles using real-life examples. Our presenter will explain how these principles apply to both commercial and standby letters of credit and how these two types differ. In particular, you'll learn how to draft letters of credit and how to avoid problems when drawing upon them for payment.
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Agenda
What Is a Letter of Credit?
- Definition
- Uses
Basic Mechanics and Principles of Letters of Credit
- Structure and Flow
- Principles
- Risk Mitigation
- A Sample LC
Confirmed Letters of Credit
- Adding a Fourth Party to the Structure
- Additional Risk Mitigation
Standby LCs vs. Commercial LCs
- Definition of Standby Letter of Credit
- Characteristics of Standby Letters of Credit
Standby LCs vs. Guarantees and Bonds
- Ancillary and Contract Guarantees, Surety Bonds
- Independent and Demand Guarantees
Rules and Regulations to Be Aware of
- The Uniform Customs and Practice for Documentary Credits
- The Uniform Commercial Code, Article 5
- International Standard Banking Practice for the Examination of Documents Under Documentary Credits
- The International Standby Practices
- The Uniform Rules for Demand Guarantees (International Transactions)
- Anti-Boycott Regulations (International Transactions)
- Office of Foreign Assets Control Sanctions (International Transactions)
Using Standby Letters of Credit
- Credit Line Backup (Instead of Commercial LCs)
- Evergreen L/Cs
- Bid Bonds (Seller Is Applicant)
- Performance/Warranty Bonds (Seller Is Applicant)
- Advance Payment Bonds (Seller Is Applicant)
- Direct-Pay Letters of Credit
ISP vs. UCP vs. URDG
Standby Problems
- Non-Documentary Conditions
- Counter-Guarantees and Local Guarantees
- Automatic Extensions and Non-Extension Notices
- Extend-Or-Pay Drawings
- Court Injunctions
- Bankruptcy of the Applicant
- Insolvency of the Issuing Bank
- Abusive Drawings
Tips, Tricks, and Facts About Standbys
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Credits
OnDemand Course
This course was last revised on May 18, 2023.
Call 1-866-352-9540 for further credit information.
- AK CLE 1.0
- Alaska attorneys may receive 1.0 hours of continuing legal education for completing this program. Please contact the Alaska Bar Association or go to www.alaskabar.org for details regarding reciprocity with other states.
- AL CLE 1.1
- This course or a portion thereof has been approved by the Alabama State Mandatory Continuing Legal Education Commission for a maximum of 1.1 hours credit.
- AR CLE 1.0
- This course has been approved for 1.0 hours of CLE by the Arkansas CLE Board.
- Arizona CLE 1.0
- The Arizona State Bar does not pre-approve or pre-certify MCLE programs. However, records of this program and attendance will be maintained by Lorman Education Services for auditing purposes. This activity may qualify for up to 1.0 hours toward your annual CLE requirement for the State Bar of Arizona.
- CA MCLE 1.0
- Lorman Education Services is a State Bar of California approved MCLE sponsor and this course qualifies for 1.0 CLE hours of participatory credit.
- CT CLE 1.0
- Neither the Connecticut Judicial Branch nor the Commission on Minimum Continuing Legal Education approve or accredit CLE providers or activities. This course has been approved for CLE credit in jurisdictions aside from CT and therefore it automatically meets the content and delivery requirements in Connecticut. Credit is based on a 60 minute credit hour and shall be awarded as follows: 1.0 CLE credit(s).
- GA CLE 1.0
- This program has been approved by the Georgia Commission on Continuing Lawyer Competency for 1.0 CLE hours.
- HI CLE 1.0
- This program was approved by the Hawaii State Board of Continuing Legal Education for 1.0 CLE credit hours.
- IL CLE 1.0
- This course was approved for a total of 1.0 hours of MCLE Credit by the Illinois MCLE Board.
- MO CLE 1.3
- This course qualifies for self-study CLE credit in Missouri.
- ND CLE 1.0
- North Dakota CLE policy does not allow for pre-approval of any self-study courses. This course may qualify for up to 1.0 hours of CLE credit.
- NH MCLE 1.1
- NH MCLE does not approve or accredit CLE activities for the NH Minimum CLE requirement. Lorman Education Services believes this Ondemand course meets the requirement of NH Supreme Court Rule 53 and may qualify for CLE credit(s). Program Length: 63 Minutes.
- NM CLE 1.0
- This program has been approved by the New Mexico Minimum Continuing Legal Education Board for 1.0 hours of credit.
- NV CLE 1.0
- This program has been approved by the Nevada Board of Continuing Legal Education for 1.0 CLE hours.
- PA CLE 1.0
- This Distance Learning program has been approved by the Pennsylvania Continuing Legal Education Board for 1.0 hours of substantive law, practice and procedure CLE credit.
- RI CLE 1.0
- This program has been approved by the Rhode Island Mandatory Continuing Legal Education Commission for 1.0 hours of CLE credit.
- VT CLE 1.0
- This self-study program has been approved by the Mandatory Continuing Legal Education Board of Vermont for 1.0 hour(s) of CLE credit. Please note: Attorneys may only claim 12 credits per compliance period in this format. This course is considered "Non-Moderated Programming without Interactivity".
- WA CLE 1.0
- This program has been approved by the Washington State Board of Continuing Legal Education for 1.0 hours of A/V credit under the Law & Legal Procedure category.
- WV MCLE 1.3
- This program has been approved by the West Virginia State Bar MCLE Commission for 1.3 MCLE hours.
To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.
This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
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Credit
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
Faculty
Buddy Baker
Goldman Sachs Bank USA
- More than 45 years of experience in international trade finance
- Internal subject matter expert on letters of credit with Goldman Sachs
- Recognized expert in trade finance and published author
- Frequent presentations for national associations of exporters, importers, bankers, and lawyers
- Actively involved in establishing national and worldwide standard practices for LCs
- U.S. representative to the International Chamber of Commerce Banking Commission
- Member of the Standby and Commercial Letter of Credit Committees of the American Bankers Association
- Member of the Americas Advisory Council of the Institute for International Banking Law and Practice
- Advisory member of the Uniform Commercial Code Article 5 Drafting Committee of the National Conference of Commissioners on Uniform State Laws
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Why Lorman?
Over 37 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.
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