Standby
Letters of Credit*
Presenter: Buddy Baker
Course Description:
Many people think
of standby letters of credit as nearly equivalent to cash.
What they don’t realize is that many letters of
credit don’t get paid when called upon. Most often
this is due to misunderstanding how standby’s work
and then failing to present the documents correctly; indeed,
occasionally it is not even possible to present the documents
that are called for. Sometimes it is because the bank
that issued the standby is ordered not to pay by a court
either because the customer hasgone bankrupt and payment
is deemed a preference (exactly what you thought the standby
was protecting you against) or because the customer claims
you have no right to the payment and has managed to get
an injunction. And sometimes is because the bank that
issued the standby has been declared insolvent and the
regulators (e.g., the FDIC)
have repudiated the standby. This session will take an
in-depth look at how standby letters of credit work and
the reasons they sometimes don’t. Participants will
learn how to protect themselves against non-payment.
Bio:
Walter
(Buddy) Baker is a Director with the Dutch bank
ABN AMRO. Based in Chicago, Buddy is the global head of
the bank’s Trade Advisory group, responsible for
understanding the interpreting the various rules and regulations
governing cross-border trade in the 66 countries where
ABN AMRO has branches and subsidiaries. Mr. Baker is a
recognized expert in letters of credit. He is a long-time
member of the National Letter of Credit Committee of the
International Financial Services Association is actively
involved in establishing national and worldwide standard
practices for L/Cs, such as the current versions of the
Uniform Customs and Practice for Documentary Credits (“UCP500”),
Article 5 of the Uniform Commercial Code, the recent International
Standby Practices (“ISP98”), and the new “eUCP”
supplement to the UCP, dealing with electronic documents,
and the official ICC guide for examining letter of credit
documents, the International Standard Banking Practices
for the Examination of Documents under Letters of Credit
(“ISBP”). He also serves as an advisory member
of the Board of Directors of the FCIB. Mr. Baker received
his undergraduate degree from Yale University and his
MBA from Northwestern.
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