Guarantees & Standby - Letters of Credit

Become an expert in all aspects of guarantee (standby) processes

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A one-day Letters of Credit Training

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Download: Course Outline

Introduction to International Guarantees (Bonds)

Nature of Guarantees – Independent (Demand) v. Accessory Guarantee (Suretyships):
- Purpose of Guarantees
- The 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 an accessory guarantee?
- Issuers of Guarantees

8 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
- The issue of non-documentary conditions and how to deal with them

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 – the 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

An international consultant and lecturer in Trade Finance delivers Redcliffe’s Guarantees and Standby Letters of Credit training course.

He 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 many leading local and international banks in various positions, including trade finance specialist, head of trade finance, trade finance risk manager, and in-house trainer.

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. It is composed of over forty experts from all over the world.

Our letter of credit courses trainer 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 helped 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
The ICC Banking Commission Group of Experts. Which drafted the official ICC Banking Commission Opinions on ICC Rules (2010-2011)
In October 2014, the trainer was appointed to the position of Secretary of the Commission on Commercial Law and Practice of the ICC Czech Republic
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 help consultancy services of ICC CR for banks, carriers, insurance companies and traders
A DOCDEX Expert of the ICC Centre for Expertise with the 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). He is the lead tutor in the Finance of International Trade with the eBusiness School International.

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

Redcliffe's specialist has led and participated in several learning interventions held across the world in more than 65 countries, including India, Sri Lanka, Singapore, Zambia, South Africa, the U.K., the USA, Turkey, Russia, the UAE, and China.

He is the author of best-selling books on documentary credits and a member of the editorial board for the magazine Documentary Credit World.

The main purpose of this Standby Letter of Credit Training is to familiarise you with the main aspects of the guarantee (standby L/C) process and working with letters of credit. We explore standard as well as advanced situations, problematic issues and current topics in the field of demand guarantees and standby L/C practice. Particular focus will be on the proper drafting of the terms and conditions of the instruments.

This course will provide case studies, examples, and discussions, using active participation to cement the learning. We will distribute material relevant to the course, and a certificate of attendance will be delivered to all those who complete the course.

We recommend a good working knowledge and familiarity with guarantees to derive the greatest value from this course.

This is a practical workshop conducted by a leading international trade finance trainer.
Master the main aspects of the demand guarantees and standbys from the international best practices point of view.
Understand the most common situations when to use demand guarantees and standbys.
Become aware of the risks involved and how to mitigate them.
When to apply ICC (International Chamber of Commerce) Rules.
Gain up-to-date knowledge on the recent developments in ICC Opinions, important Docdex cases, and significant court cases.

Guarantees & Standby Letters of Credit training is a ‘must know’ for:

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

Redcliffe Training’s Standby Letter of Credit training course is an advanced practical workshop. We provide you with a very comprehensive coverage of all the main aspects of using guarantees and standbys in international business under ICC Rules – URDG 758 for Demand Guarantees and UCP 600 or ISP 98 for Standbys.

We cover the most significant recent ICC Banking Commission Opinions and DOCDEX (Documentary Credit Dispute Resolution Expertise) cases.
Participants will learn how to issue and use the security instruments in their daily work. The various case studies and examples help to create debates on the issues and solidify the learning.

This course is very focused and practical. We deal with standard, advanced situations and practical issues on demand guarantees and standbys. Following best practices as reflected in ICC rules and publications.

Participants will take away all relevant UCP 600, URDG 758, and ISP 98 provisions practically, i.e. by applying them through various case studies and debates on the subject.

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