ISP 98 - 2.01

[dinesh2476]

Dear Experts,

I see the below difference between Acceptance & deferred payment. please provide your opinion on this

2.01 Undertaking to Honour by Issuer and Any Confirmer to Beneficiary

i. by acceptance of a draft drawn by the beneficiary on the issuer, in which case the issuer honours by:
(a) timely accepting the draft; and
(b) thereafter paying the holder of the draft on presentation of the accepted draft on or after its maturity.

ii. by deferred payment of a demand made by the beneficiary on the issuer, in which case the issuer honours by:
(a) timely incurring a deferred payment obligation;
and
(b) thereafter paying at maturity.

Regards
Dinesh Kumar

[picant]

Hi Pal,

an accepted draft may be endorsed and presented by bonafide holder on the maturity date or days after depending on local laws.
Deferred payment is an undertaking by issuer and/or confirmer that "at maturity" will effect the due payment, without presentation of any sort of documents.
Others ignored.
Ciao

[dinesh2476]

Dear Picant,

While i know these terms under commercial LC, what needs to be done and the obligation of the issuer, facing challenge in terms understanding this under standby LC's. I hardly remember standby LC's calling for draft other than usual documents simple demand from the beneficiary claiming failure of the applicant to make payment for the shipped goods and simple Invoice for unpaid Invoice.

Please share some scenario's in which we look for article 2.01

Thanks &Regards
Dinesh Kumar

[picant]

Hi Pal,

s you probably know ISP98 is not an ICC Product, so not discussed between banks, but only approved under USA moral suasion.
I have copy of the Official Commentary , probably under review, that stated referring to deferred payment
by issuer, the way is the same as per UCP, if no notice of refusal is given in due time the obligation to pay is confirmed even if not declared. Other cases are explicated with details. If you want I can send this chapter, by email, not breaking the copyright, for reviewing. my email picchi.antonio@virgilio.it
ciao

[dinesh2476]

Dear Picant,

can you tell us the standby type that covers draft drawn on issuer?

just share some example the manner standby requires draft?

Regards
Dinesh Kumar