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Because of widespread interest in this subject, the ICC Banking Commission has decided to post its official Opinion on non-banks and letters of credit on the ICC web site.
The UCP reflects that state of practice, namely a situation where the issuer or other actor on a letter of credit is a bank.
As a result, although there is no affirmative rule in the UCP prohibiting entities that are not banks from issuing, confirming, paying, negotiating, or advising letters of credit, its vocabulary (“issuing bank”, “confirming bank”, etc.) assumes that these entities are banks.
This assumption is based on the recognition that there are three principal advantages to bank issuance and handling of letters: namely that banks have the operational expertise to handle issuance and presentation under letters of credit in a professional manner, that they have the tradition of independence from the underlying transaction which is the basis of the commercial reputation of the letter of credit, and that in virtually all countries banks are specially regulated with a view toward protecting those who rely on their undertakings.
|Code ISBN :||Free0023|
|Number of pages :||3|
|Publishing date :||2002-10-01|
International Chamber of Commerce (ICC) Publication