How UCC Article 5 governs letters of credit in the US, its non-variable provisions, and the legal nuances that affect issuers and beneficiaries.
English Court of Appeal (Civil Division) reversed trial judgments in favour of standby beneficiaries.
Canada's Court of Appeal of Alberta affirmed trial judgment, dismissing LC Applicant's appeal and terminating short term interim injunction.
Very few banks will now issue an LC using the SWIFT MT799 format as most banks, especially in Europe, will reject this format for an LC issuance. The banks that will do this are those that are operating in their old legacy systems that have not converted or upgraded with the new SWIFT 2021 standards. This sentiment was expressed at the IIBLP 2022 Americas Standby & Guarantee Forum. Fields of the new MT760 which took effect in November 2021 are quite specific on what data to put, number of characters limitation, and make it easy for straight thru processing for back office systems to interpret.
Conversely, an MT799 is a free format message where one could cut and paste an entire LC from an MS word format. Banks may be willing to accept an MT799 for short messages that is more informational in nature or an inquiry with regard to an LC, but to put in it the complete text of an LC would mean that an LC specialist would have to read and interpret what is in the message. In such instances, this is where human interpretation could differ and alter the original intent of the issuer in sending the MT799 message. An MT760 is quite clear in that it is an incoming standby LC or guarantee. A banker could quickly route it to their bank’s issuance section or designated standby LC specialist. On the other hand, an MT799 could be anything. Therefore, it slows down the production area as one has to ascertain what the message is all about.
In the last two years, one banker commenting at the 2022 Americas Forum said that their bank has received only a handful of standbys issued via MT799. For an important correspondent, the bank has accommodated this and manually performed a workaround solution. On two occasions, the bank rejected MT799 issuances but considers these to be isolated cases.
Through the years, many banks have used the MT799 instead of more appropriate SWIFT message types such as:
Five draft opinions – some garnering much more attention than others – were finalized in an ICC Banking Commission quarterly discussion session
Following the discussion of ICC Opinions on 2 July 2024, updates on other ICC Banking Commission projects were given. ICC
In an attempt to clarify aspects of UCP600 Article 10, the ICC Banking Commission has issued its 10th Technical Advisory
Upon request of its customer, Lummus Technology Heat Transfer B.V., Credit Agricole Corporate & Investment Bank issued a letter
Sign up to receive occasional DCW emails highlighting content
