Transfer clause

Shahed · Post by **Shahed** » Thu Jul 30, 2015 1:00 am

Is there any risk if an issuing bank insert the following transfer clause in its SBLC subject to ISP98?

-"The beneficiary may transfer this SBLC without the consent of the applicant or the issuing financial institution."

Your thoughts, please.

Regards,

Shahed

[edited 7/30/2015 2:46:00 PM]

JimBarnes · Post by **JimBarnes** » Thu Jul 30, 2015 1:00 am

ISP98 Rule 6.02(b) provides a number of default rules that would protect an issuer where "a standby states that it is transferable without further provision".

I would worry that this standby text includes a further provision so that the issuer could not rely on those protections, particularly those in Rules 6.02(b)(iii) and 6.03(b).

Regards, Jim Barnes
[edited 7/30/2015 10:36:37 PM: change 3 to iii]