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SWQ_94
10.6.2008 |
Clean
Sight Letter of Credit |
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Question: |
Name: Saleh Dada
I came across a term Irrevocable Clean Sight Letter
of Credit. Upon inquiry with the issuing bank, we were advised that it is
same as Standby Letter of Credit and is subject to ISP98.
Kindly advice if the explanation provided to us is
acceptable.
Thank you.
Yours truly
Saleh Dada
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Answer
(from Don Smith) |
Approximately 50% of all new standby letters of credit
issued in the United States are issued subject to ISP98 - a set of rules
written specifically for standby letters of credit. They have been in
existence for 10+ years and are very popular in the U.S. and becoming more
popular around the world.
Your willingness to accept such a credit depends on
your policy, needs and the specific transaction.
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Answer
(from Bogdan Ilie) |
I never heard about "clean sight LC" expression.
Word "clean" makes me think (in connection with
collections) to an LC asking for presentation of draft only. But in no way
suggest that it is a stand-by LC. In the end, what counts is that the LC has
clear terms and conditions, to be subject either to ISP98 or to UCP600 and
to be accepted by the
beneficiary (and negotiating/confirming bank if any).
Best regards,
Bogdan
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Answer
(from T.O. Lee) |
In addition to the comments made by Don, Rule 1.01 (b)
of ISP98 states that ISP98 is applicable to "other similar undertaking,
however named and described". But the condition is "express
reference to ISP98".
T. O.
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