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Guarantees & Standby - Letters of Credit

0 Part Course  |  Learn how to become familiar with all main aspects of guarantee (standby) processes

Advanced Excel and Risk Modelling Course

A one-day course presented in two half-day live webinars

This course is a ‘must know’ for;

  • Trade finance practitioners, especially those running bank guarantee and standby L/Cs transactions day-to-day;
  • Corporate bankers and relationship managers, providing customers with guarantees and standbys;
  • Middle office professionals managing or overseeing the execution of client’s guarantee and standby facilities, for example tender bank guarantees;
  • Legal and other advisers involved in corporate banking; and
  • Due Diligence providers (audit, compliance), wanting a closer understanding of the guarantee and standby L/C operations.

  • Practical workshop conducted by a leading international trade finance trainer;
  • Learning about main aspects of the demand guarantees and standbys from the international best practices point of view;
  • Getting familiar with the most common situations when demand guarantees and standbys are used;
  • Understanding the risks involved and how to mitigate them;
  • Applying ICC (International Chamber of Commerce) Rules in the most appropriate manner;
  • Getting up to date with the recent developments in the area such as recent ICC Opinions, important Docdex cases, significant court cases

The main purpose of the seminar is to familiarize the participants with all the main aspects of the guarantee (standby L/C) process including standard as well as more advanced situations, problematic issues and current topics in the field of demand guarantees and standby L/C practice with particular focus on the proper drafting of the terms and conditions of the instruments.

The workshop will be provided in the form of case studies, examples, and discussions, i.e. with the active participation of all participants.

Material relevant to the course will be distributed and a certificate of attendance will be delivered to all those who complete the course.

A good working knowledge and familiarity with guarantees is recommended to derive the maximum benefit from this course.

Part One

Introduction to International Guarantees (Bonds)

  • Nature of Guarantees – Independent (Demand) v. Accessory Guarantee (Suretyships)
    • Purpose of Guarantees
    • Main features of Guarantees
    • Abstract (Demand) Guarantees explained
    • Accessory (Suretyship) Guarantees explained
    • Examples of Demand and Accessory guarantees
    • Case studies – is it a demand or accessory guarantee?
    • Issuers of Guarantees 

Main types of International Demand Guarantees

  • Tender Guarantee
  • Advance payment Guarantee
  • Performance Guarantee
  • Retention Money Guarantee
  • Warranty Guarantee
  • Payment Guarantee
  • Facility Guarantee
  • Shipping Guarantee 

Demand Guarantee Cycle

  • Issuance of Guarantees
    • Direct v. Indirect Guarantees
    • Advising of Direct Guarantee
    • Counter-Guarantee and Guarantee letter
  • Amendments to Letter of Guarantees
    • Problems with amendments in practice
  • Termination of Guarantees
    • Problems with amendments in practice for letter of guarantee types
  • Demands – main issues
    • Terms and conditions of guarantees regarding presentations for demands
    • Problems with demands in practice – examination of demands 

Specific procedural issues

  • ICC Rules for Demand Guarantees – URDG 758 – main principles explained
  • Terms and Conditions of Demand Guarantees
    • Effectiveness / Operativeness clauses
    • Reduction Clauses
    • Termination Clauses
    • Issue of non-documentary conditions and how to deal with it

Part Two

Introduction to International Standby Letters of Credit

  • Nature of Standby Letters of Credit
    • Purpose of Standbys
    • History of Standbys
    • Main features of Standbys
    • Examples of Standby Letters of Credit 

About Standby Letter of Credit Cycle

  • Issuance of Standby
    • Direct v. Indirect Standby
    • Advising of Standby
    • Confirmation of Standby
  • Amendments to Standbys and letter of credit
  • Termination of Standbys
  • Demands under Standbys – main issues 

Standby Letter of Credit management subject to ICC Rules UCP 600

  • Standby subject to UCP 600 rules – main issues
  • Pitfalls of using UCP 600 for standbys – main practical issues
  • Examination of documents made under a standby subject to UCP 600
    • Cases based on significant ICC Banking Commission Opinions related to Standbys under UCP 600 

Standby Letter of Credit subject to International Standby Practices - ISP98

  • Standby subject to ISP98 – main issues
  • Standby subject to ISP98 - main practical aspects
  • Examination of documents presented under a standby subject to ISP98 rules

Specific procedural issues related to Standby Letter of Credit

  • Extend or pay demands
  • Evergreen clauses – main principles of proper drafting

The trainer is an international consultant and lecturer in trade finance. He also serves as the Secretary to the Banking Commission of the ICC Czech Republic which he regularly represents at the ICC Banking Commission.

He has worked for a number of leading local and international banks in various positions as a trade finance specialist, head of trade finance, trade finance risk manager, in-house trainer and others.

He has been deeply involved in the revision of UCP (Uniform Customs & Practice for Documentary Credits) as a member of the UCP 600 Consulting group, which is comprised of over forty experts from all over the world.

He chaired the working groups of the ICC CR which revised translations of UCP 500, UCP 600, eUCP, ISP98, URDG 758, ISDGP (International Standard Demand Guarantee Practice) and other Banking Commission documents as well as Incoterms 2010 and Incoterms 2020 into the Czech language.

He was involved in the development of URBPO (Uniform Rules for Bank Payment Obligations) as a member of the ICC Banking Commission Consulting group on BPO (business process outsourcing), and is also a member of:
  • The ICC Task Force on Guarantees
  • Global Supply Chain Finance Forum
  • In the years 2010-2011 he also served as a member of the ICC Banking Commission Group of Experts which drafted the official ICC Banking Commission Opinions on ICC Rules
  • In October 2014, the trainer was appointed to the position of the Secretary of Commission on Commercial Law and Practice of the ICC Czech Republic.
  • He is also the appointed ICC CR expert to reply to enquiries related to Documentary Credits (D/Cs) and Structured Trade Finance (STF), as well as develop technical assistance consultancy services of ICC CR for banks, carriers, insurance companies and traders.
  • He is a DOCDEX Expert of ICC Centre for Expertise with ICC International Arbitration Court in Paris.
  • He is also an arbitrator with the Vilnius Arbitration Court, Lithuania.
He has been an active trainer under the Global Trade Finance program of the IFC (International Finance Corporation – a member of the World Bank Group) and similar trade finance facilitation programs of other DFIs (Development finance institutions), and is also the lead tutor in the Finance of International Trade with the eBusiness School International.

The trainer has delivered numerous seminars on the Incoterms 2000, Incoterms 2010 and Incoterms 2020, documentary credits, issuance of bank guarantees, standbys and other trade finance services, both in Czech Republic and globally. As an international trade finance consultant and lecturer, he has frequently lectured for the Banking Institute, Institute of Foreign Trade Transport & Forwarding, ICC NCs and the Economic Chamber of Commerce of the Czech Republic and others.

He has led and actively participated in a number of learning interventions held in India, Sri Lanka, Nepal, Singapore, Zambia, Uganda, Ghana, South Africa, Mozambique, Nigeria, U.K., USA, Ireland, Turkey, Russia, UAE, Vietnam, Mongolia, China and many other countries in Europe, Asia and Africa (in more than 65 countries of the world). He is the author of best-selling books on documentary credits and a member of the editorial board for the magazine Documentary Credit World.

This is an advanced practical workshop on international guarantees and standby letters of credit.

The workshop has been developed to provide very comprehensive coverage of the subject. It will explain all the main aspects of using guarantees and standbys in international business in accordance with ICC Rules – URDG 758 for Demand Guarantees and UCP 600 or ISP 98 for Standbys. The most significant recent ICC Banking Commission Opinions and DOCDEX (Documentary Credit Dispute Resolution Expertise) cases will also be covered in the lectures.

The workshop is very focused and practical. Participants will learn how to issue and use the security instruments in their daily work, i.e. there will be plenty of various case studies, examples and debates on the issues.

The workshop deals with both the standard and more advanced situations and practical issues in relation to demand guarantees and standbys in accordance with best practices as reflected in ICC rules and publications. Participants will learn all relevant main UCP 600, URDG 758, and ISP 98 provisions in a practical manner, i.e. by applying them through various case studies and debates on the subject.

Dates coming soon

£695.00

Discounts available:

Book multiple places on both parts in one order for the below discounts:

  • 2+ places at 40% less = £834.00
    per person
  • 4+ places at 50% less = £695.00
    per person
  • 6+ places at 60% less = £556.00
    per person
  • 9+ places at 70% less = £417.00
    per person
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