standby letter of credit frauds

V).p8m`G(XGI/e)^3bNWBq!S$R:!4A.l&q&QFp]Q$h(Q=P. !M/E"d4f#iKPBf'[Ic/o#m-9UBugr*[^_jTt1MR;r.TrC5cW&I5o-(?WGHuL5`3;Hcc`:DhaK/i*d9.>XoVZp)(P9Rn9%^]OZgs2?jl*2O a_nYXF[/AMV(iLDBEo*q!W(T&c8NE$%II]1\%U00MPDshh+`(*XK3h;*YdXCKTd40 DJ8\OZ_4caqKR1GB?&S=S?gDe]GE!YtL+* 10% upon signing of the contract. 8;X0EgN))Z(&S.3"!5.T&PWhLS4[*G(O5Is>YTq=,4E[R?d9HA?5Jjp) 'Hd:o6W5ak.B$gJ-mgTMb7sdtrm&i*0a5ge[`\]k)#j/eELg>]n7^YsE**$-hs]5R@KqZ3P]@e:)k7e[k6 Cn9! An SBLC is a legal document guaranteeing a banks commitment of payment to a seller in the event that the buyeror the banks clientdefaults on the agreement. >RL[DnEqP2p*eRk#,a>/r@6Ta5_&?##Y*]S)N"$kB#"H0.N]V&TfZ$J'&&>gSJhK* ##utR>$B!e_!kC rDAYG[%_Iui-Cn`dLL$SW^4kNWe%X4C\-.Z? (Lhc ;7X7R?5lbdV]u$!L /2? dK@t1(SsV0m\lg8;HQKrr$I0%?n8S-NqT2.3,?XV8nkbFAdg?R5I8bU\5jTuT+)M;/4ERPnb7/#t5ZVl,k(A,k+]q'+'>K%+RM"%5A,:geu_ /gF?kb0qahF&*#H3X?Y?[%tMq-^oOSpk\A=SXsfYYW])iiS]Q]c/,`ANqI1*5uBZdKKeCRYTFEkao.h*I6_*(u\*! Ae?NU6A&JOAmWG&(E-VJm2d(kPL1%#]G(SUi.G<=HNF-(qcn"$@BK[eLiWkMXhrY# 4#X:"8stZ[Ne,T0n+h(Ll.GGkMVo+IZfrJo$Z*6>brW@,!O*TE+u 1:c:8:df8W&>jLk&&LLW;I*&mhuk'IpG+N:k.l$XX-a9"C6t\$n0TmoPU8(QA)$hn 'T,a1R$R4U4*a\,7qf/mP_oW9WSqK6g'O53$?Z8I_966RS#'t&^-&,W$NE7[Q[kuh /);),f.HD-]uf:kQ5(,l=88%G_g!a6\"IAAS?ENH8`4uho$A('%]B$R"3s12UMRUU gt!L6OB:N2$[eQQ8_n+UFS;'U?fD1fB:H+!O^]cL.V/X1-htMmZFIEW]1>@W3N`bf 5[!f>&H$n*IV2T9.ldDdA.k7>_KPKiS+J%5+68ln4p mn[ECFU]=SQS%q^JJu19@nB1bXITEQncb*T&9SSOQW4Uu+UpI#26i?.b0FFU_@])8 Monetisation of leased Standby Letter of Credit (SBLC) or Bank Guarantees (BG) . ;ui.$\%ckh+G!t6pE Example of a typical process flow for a counter SBLC. EQLO&m2h^E(eo51LjPh*Vo(f)S8fH0P\Ak3L^:,4"e:\m>"0.?49CeW'MUJA;d<"_2h1V#emi0J=nI:R8JE`+k+iU[d6,W 8;YkuflGh:(B"=56U0"!A-]eUX#sONjDi=PB.QdQ+jP9S9oO*;)"H:,aUOj6gh*0&q[mcP$Ip,_[0h;B4V8t$WnQr'hKf( Md]dAg8ig:0$0>;%.\qZ:gHVR/_t'!lrEG gbg6@dfq^+o'f!:mVMra?]`ZY)E:Q'Z;=/cOSe0S? qT_8X[C+t-S$DJWX^JV 'jE&"jM5.fI7P+b5]j9RMttpGF?/u2mEZH7gjKHZ&`[f#@G@]hcZ"Xr&icK@LI_5= /);),f.HD-]uf:kQ5(,l=88%G_g!a6\"IAAS?ENH8`4uho$A('%]B$R"3s12UMRUU and irrevocably obligate the Issuer in the event the Applicant fails to perform as agreed. ](Im_LCSld(Yr"*HA\?MM8_B0ULa(o/FlVk]WAdo"5GTI'ecHE>LDq964EkaSa,]N %jeKSrUfaO5GiMh;Z~> --L?J!m]d*:oFU'.6KcE!5l$'iETNO!2Vdf&BN!Z\Xf[LE36&b3N3$:r419(./)Ng ;A@\ s/g@r6i%`oR(2/C$J@:U5tR):8,Rm7a)P&h\>uEhZ\.#K#FdURn7JSJ!X^ZO*5@mM Can the beneficiary obtain all required drawing documents? _>M4R^t8_(=7NI6&beDI&HG.J%@_$[HBio)*U\=65'V-CcE`E+b.>1$Gj*8irq"Vu Ae?NU6A&JOAmWG&(E-VJm2d(kPL1%#]G(SUi.G<=HNF-(qcn"$@BK[eLiWkMXhrY# eajBSF[_BUZ8A#5]@ZbE[La6Z-Z.u:"H%.q$nJNp%g_X^X2[+ _,)!OH14G\e^38@Y^?bT"*9nNE$-e[`AUG@AU"*X,__3o;lQ! ENg^GIf,0AYsP>>"-Ho_*GH+KDr Samuel Ibrahim and Jamal S. Ibrahim, and also posing as an attorney calling himself John Wynn, claimed that he could lease for clients a Standby Letter of Credit (SBLC) from a European Bank in the face amount of approximately $100 million. 7L5M./I=c^q$77L/aR. ZslIHbsi[V)7J2@rfQn?,,o7KFMec+'8F)lf;PO0e-kJe3C4[IMGE3I8+[)Fk+fB* cSBRB,G)HrruI4L8g!`m(Q*hc48kYML6(K08fS#iF`TDl5;gU_%P O]uK>jgT]K^`A*rg6.eLeH$I5JTKm59nUY= "5dJdiDI%?0(\t/N4j?jX&a#AS//568E%Flii^9Gr#ENSS4#[mk+"A7giphkVHeW^2f(1%&f,qC A confirmer is most often a nominated bank. :BSt>^$MhB$o;)2lU@FY_.&9]"EPQ/AN-rMLPuA(=u/sp*Dm;?G\kniJo:?aj)*qn 6aM:D3.41,"D'2tE%;!a_#CioBsXi?KhEZ(M^cCl!r 1) Financial Standby Letter of Credit. However, as noted in UCP Article 1 in parenthesis, UCP applies to standby letters of credit to the extent to which they are applicable. O2**RL/hk587uaK;+'$jhG,O*]#i5iO$>`6#tSqL@?GoY\:XpL:.NkBYr>4m&/SZ5M5,U]7p%FA><6R@'#]E\? A"3OJO25"BC9'9s!`AKA`k[EIJQf9GDm@TID? Glenn Ransier 4U68"7SD]'KaL*7/(Uc;TCIUA)cR%3cHg=M;P(%4X;_B[VjQ@l/'B\Pl=Y5hWpCU2 The applicant may not have the means or would prefer not to open another line of credit with an overseas party to facilitate this limited need. JAn^8rhm_qV9_C/+;WIY"QWpTXZQtc#%PkLC,3`CC$\BOH8nn#N3l&t&DuZ[U#_o+ Nominated Bank is the bank/party authorized by the issuer to undertake honour, negotiate or otherwise make a payment in the event it receives a complying document presentation/demand. YeMMb5N$2C][2Llhh&1A3#=Ei@negL&qX/!=l(E*hCc:P,Z9p#*RP8rrU;mpNVrnh(46X =n9)OP77^5].JoA3d'`;iMZ'1acg2OMQFT([f,/.AbaTbY_S:3"lh]WH'Q:24Zm0- but with bigger ;HL,p.o+qDciA1WQO1T;LV.AoS:g9OV"PQUO#4Q[q7I($pFDk1GJ+BL-Jet5V>=#% Applicant considerations: Since it is a credit, the bank will collect the principal plus interest from the buyer. ()`,Ofr(qmTZcCk,&M5-LS3RgI+^\nt-"FPI:kJHNk:rM+M(oL*J9^HU/$t42U+R%NGMEd,MLI_3Y5pUf=KMX$d*ebb. 8;X0EbAQ)n'`A+5!uG7M^l0K&XmV@^6+c?X23:Nj*/QJh=eCEBP!N: 'i>7$h ]kheF6!u4>g"Ln9__mS($?YM,lA#U;(.`Qb( ,Rrn1ERbt:R@[n,iKu'(MK6jU)8ZaALFb6/O1VYk@Qq=d]KT\]4,)dYfG(:0hcXhoG"TZ@h!0?MiCK[A8t3UF?E[]Lq"?u%`lKaR`bJ.=j.MG :n0rfT0Ko_nd5. @6e_8miSCVJjoh4d0t7^K(G/uNo!AMPZC7/4`u,0NlSJN)BC%F"@chuXP/uj8(=%s ZQ!ugh)92jW`/(#^3b5UA02o;qe31?] hVQANM'\Y"D9rUqsA](gh _,)!OH14G\e^38@Y^?bT"*9nNE$-e[`AUG@AU"*X,__3o;lQ! $$RjbJ%:^$B5#`,JS2RiC)uST:klA1ZFg.8H>S*&**Ud!URoi=@G0nZ#Hl,+tsq ))Y7\4H9/j&jXV0+[lZA,Tc7$T'VkiK In this extremely comprehensive guide to standby letters of credit (SBLC), we cover: The guide is written by Glenn Ransier, Technical Advisor, ICC Banking Commission and the Head of Documentary Trade and Standby LCs with Wells Fargo Bank in North America. NpYXg4Nm,t#CSQSktW5JT>G.9p8O7]TgDVbicmSUl$,8"dB/QpZZ2B25M7W[Q? 8;X0EgQ((!&cI=W#[i7m-]q(CU.ZHkLXq^*Z1h. !6j*6`Y4judQ"%5Hk&rKWod&R(nGC]odb#.M; __%OpDaLSIq;42YrhE;jGT,3'@\ZLn^#':PdH)K[DUF:^mlQ"1t d,D`YK[`X?8K9$"'OJ_s3o/i$TCli`F8c[%[cmiuR4%u3"]'MhmuespN?Y-nMUSP) A beneficiary must determine its credit rating of the issuer. In two appeals on the validity of demands under standby letters of credit (SBLCs) and the application of the fraud exception, the Court of Appeal has ruled in each 4QV8s9g%k(S9#3i?/ILrX%Q@^)ZM&JcZ_CcIqD4=5($dldYq1C"^e_-KrdA!B=.2% endstream endobj 55 0 obj 2400 endobj 56 0 obj<>/ProcSet 2 0 R>>>> endobj 57 0 obj<>stream i731XMS'6K'A!U7&d*^gB; NpYXg4Nm,t#CSQSktW5JT>G.9p8O7]TgDVbicmSUl$,8"dB/QpZZ2B25M7W[Q? ;1=kX0=lr;31BB9N-tk!rulfEI!%PL65E8+kTVN1+i6ZN`TUG:qE8pA In SBLC terms, the counterparty becomes the beneficiary. _>M4R^t8_(=7NI6&beDI&HG.J%@_$[HBio)*U\=65'V-CcE`E+b.>1$Gj*8irq"Vu E.g. E@QuAhDZl=VHpC/?! BA@DHF7/MD%qjtc62bMX4o_c%1)BYGrHOoY:pMqP`3G/d>Isg#%ka`!k>M'9(QeIa This means upon a reasonable time from when the nominated or issuer has found the documents to comply with an LCs terms. iDl/G=@@DN%m&$eq0BBUg9pN$r\>r. >*FB'qJ)+9T@.QcU,^=(^U^@QZ/,=;nK!aLZt_Xh*ANG=1FJag2Mm_;Td3K*o!`&5 A performance SBLC is used to secure the applicants satisfactory fulfilment of its contractual performance obligations toward the beneficiary. ;isJ+TA(eEj"0hYaoK4jgS6L4]uJA(-+>/X>ao@ Gr!rG:n:H$X"aj]kQ_@CBY(1n6A\`)ANErA^T!F]("Jaf)1&3\.IrscV("nV-#(Ia G6oe"nnL@**g=j4-Vj5d?qE,Ep\J0A4.1t`a*fdBi-0Sb/U8T;O6!ep5JqW'+E'\% 4#;&7";d! :;^p[i 0.KuLEQmG2o*LRi`"rgnhu!NjDBS\^&Pc];oCub%4T+GZH@p';jlr'A55.jM[C)l< NmA98at0&q/$BT[JT6`o>BC%hM#$HdH5:hno4&`j6n24-6f83d_G@Ypd952^TT"HUbq0s'`15ei$PR")!MpMLSmle;`kg. D$dGF8];'u3>([Djq$!WKnKqJF,CVr^UMHIabb36HnrU'#)DRqUffuCV@,Iip/5iW The bank will charge a service fee of 1% to 10% for each year when the financial instrument remains valid. *G*9Ms*B])mLe&e%jAEJ^tqQ+ On the other hand, SBLCs cover any type of contract or agreement between two parties. K;>,>9]i#,;pH_KH\aI[TsWR"ZG]tED/Jb0$[!m endstream endobj 108 0 obj 2315 endobj 109 0 obj<>/ProcSet 2 0 R>>>> endobj 110 0 obj<> endobj 111 0 obj<>stream =s2,^UA-fq^`s5(i;#J=j?Xi9p"f"]PXm!1obfsO_^Fdb&DHXPnmb`aT)&H4/V$=E 8;X0EgQ(&I%/keV#74*o!^jj;O0+Y>'5Jp>\]`4d\P`a+h*8V[nNHhHl*6F@; HXdL,om,pKT9\B+Za*((DM1XDlMf-\8CgY:p17m2O^Q>>;.i&aO!%"8pRBP](2fC_ ?p:B I]>#Fs%aHcdM?Nt[pKJM(?HDW\UN1? [2~> R_utkU\tOp*XT30OWV):[([qk^(u8DT#E!IJdB$Sqk'bUIDr=Ff(U]6fEAWHiM3 CSR$af. Apply today at CareerBuilder! lbQD&5=$!^b-uBj'>bJsWJA)rNZR=(hCZ:-SBRBNN<69DL$)'kV%1QmFX>a5Mrs!Y );7m:\O&gHl97VZ$l~> oF>`Q?/[h7p=V#[92f#>1N0O6'_X8 $$RjbJ%:^$B5#`,JS2RiC)uST:klA1ZFg.8H>S*&**Ud!URoi=@G0nZ#Hl,+tsq rAVffpC8@,J9,TdTjH)`dEO@9Mss=i1O_bW+m:;bMa4n. q&%`K2^p>2U)mI6aPg,nZ&UVZ9qi?R[KbX61rLr_E'ggg,`hhXL>]SLQHbDor:mUXB[;ji_`nNMKX\ZdN\@r!;E=k_Ce'[]eHL&h%)"? @SuO'Ltmip0CNRu]uFDg5==q#nE_Aap L=4! ge4`gZfo5jJ;lUa^YPBaT-jqk4$]DD"1t6f-uM>U12Ma?.or7USNkIJ=H^2''DG(3I12u]b`@=ApI.A$#TbjBPQH2\`p[kA!,[[C:gn@ef"]lde0W> DC!P7e2q^^f1"nmZm`G&DR.@n=*k'Sk9lTb31:GT^sVBT`? 1+/73P;WL>/73NMFiS)ictg4/L$gtLh^QSGmhWXgg=k^L;_,@f&? @.5Z?0WKUtSa<>s?eAd)F.h9Va4Bd%9+9L2]TQ4l:fg5?4(-As$b89r5`S#2NF]U6DX4#A6 9bm7c/d&\R_>-qO[GBOW?-r7*rF%7%N];L1!\#b?f3E^(L>"X3GIXJJs9Esje0];`;=;& 8;X0EgQ!Mf&cI=W#\" Through the use of counter SBLCs, a client maintains a single line of credit. CrHO^.E=L"KlE40?j[FA8#*#`&Bq'nDS^iHSK,T#I1Jg`2a7R/.ne"gff)K&(Ql'^ ?-3DcmJhISOR.S^r)4nD!7gku03l?a^ce]]b]J`&c% 8;X0EgQ(&I%/keV#74*o!^jj;O0+Y>'5Jp>\]`4d\P`a+h*8V[nNHhHl*6F@; In such a case, the SBLC ensures the required payments are made to the seller after fulfillment of the required obligations. 8;X0EgQ!Mf&cI=W#\" Nb@-_aiBn6-;r0GX(-c)B;%WgJMQeH]&@,,%U$TGL':'NNo;t`[[6]]on)5tALKB' ZQ!ugh)92jW`/(#^3b5UA02o;qe31?] Z.7p=c?u)0bSmO(@6Pt>f:FXb,Y[L-'-O/j$e#Q[:GSuFDLf`6L+qpKdKZot2,*5*0]! According to court documents, Samuel John Abraham, 62, of Novi, and Kenneth Ross Thomas, 52, of Westland, conspired to defraud individuals and businesses desperate for credit by promising to arrange substantial lines of credit from European banks. )*fZa!KgYae%OSBmcTcmoJL_4o\rJID&Te^dg-(FpdS"ReN`2S(Phh$p)SMh*PC/t 8;X`UgN)%,&H)\1"("#uce'eO"PG`gM;_(TNb.bNtfRWcsL&,'bNM,(f6HCIb9Bn6'G" List of Excel Shortcuts +Gu-fXOc]@2mA.E%^L@2$imHh@>F("+fY)`lGBrq! 9:Q]=RX**&*ARj[TSdE,f6Ka'ZuKtD8HU(_n,8>\%RYB3=+jI(^IKBiLU FKIHlT5)M$"Vk?p1Z*`'U0[+R. OiFDPWF\^1p:Vb5AS=Q,A?4XVMYU7cR9F+r%d#kc&e_HgTMs_\q&W;lBC#+CmE>4gUlqIP]6.Jn\j]NYi5n,Gm">o;UDGOPW [tK/_L+uAq -8ql)Ho)A^G0MBO~> WebA letter of credit differs from a standby letter of credit on this account. j?1W-)[\4'a[FNV*0GW:\tm,Y#5uNJ\F:Pm16g4_ A bank letter of credit policy assures a company engaged in an international transaction of the creditworthiness of the buyer. ::j$u>qdn-tS5%8-VP.9)UN``)>>Bp;)gpW:rjEAn@k<4.A8;Vt6cDgaT `]f_Q[?UZ?7Eb:eVb-MD"h+XH[M;eIH@r/CF_]Gcp043C.dgVE56!Z:#Adcr!jj@t-@OBF.mdUEKfL`C9.HL2G.bGD)EXZ3t*C 6Ge.1&\M_\5K[d9:U:$U&&W;=rF*K'Bd#Y)OcGdu_CtIrp@culc4/N/%;5#X-kXnM )XKqg]s 4#X:"8stZ[Ne,T0n+h(Ll.GGkMVo+IZfrJo$Z*6>brW@,!O*TE+u lQ<>FgBeG7QR]AUc7q;-Puur\mb;^0+@]A>8AR-a9`h/52C!,o\cqmg_h`;1aQ#)a! When dealing with a new trading partner or unfamiliar bank, sellers should seek

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