ISP 98 Rule 2 obligation

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dinesh2476
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ISP 98 Rule 2 obligation

Post by dinesh2476 » Sat Jun 04, 2022 10:13 pm

Hi Experts,

It's been a long time.

Request your support clarifying the doubt on the subject rule in ISP 98

Quote
b. An issuer honours a complying presentation made to it by paying the amount demanded of it at sight unless the standby provides for honour:

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 date

I understand that issuing bank invokes its obligation not only under the accepted draft but also under its SBLC undertaking. But How long should it expect the accepted draft to be presented?

III. By negotiation, in which case the issuer honours by paying the amount demanded at sight without recourse.

-Any specific reason behind not having NEGO by USANCE LC when it is still possible to be called under standby LC?
- can we interpret in Nego credit, without recourse is available only for Sight LC and for usance LC it should be with recourse, contrary to the issuer's irrevocable understanding of the LC instrument?

Thanks & Regards
Dinesh Kumar

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picant
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Re: ISP 98 Rule 2 obligation

Post by picant » Sun Jun 05, 2022 7:03 pm

,Hi Pal,
frankly I have little experience on ISP98.
In your question play a big role the drawee:
-acceptance: the drawee is the issuer,
-negotiation : the drawee is the applicant,so in case of purchase the beneficiary will endorse the draft without recourse.

as previous said, this type of guarantee has little use in Italy!
Other comments appreciated
Ciao

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