Comparative Research On The Transfer In ISP98 And UCP500

The International Standby Practices (ISP98) reflects generally accepted practice, custom, and usage of standby letters of credit. It provides separate rules for standby letters of credit in the same sense that the Uniform rules for Demand Guarantees (URDG) do for commercial letters of credits and independent bank guarantees.The transfer of the letter of credit actually means that of the drawing rights. Its definition in ISP98 is that where a beneficiary requests that an issuer or nominated person honour a drawing from another person as if that person were the beneficiary." UCP500 states that "A transferable Credit is a Credit under which the beneficiary (First Beneficiary) may request the bank authorized to pay, incur a deferred payment undertaking, accept or negotiate (the 'Transferring Bank'), or in the case of a freely negotiable credit, the bank specifically authorized in the Credit as a Transferring Bank, to make the credit available in whole or in part to one or more other beneficiary (ies) [Second Beneficiary (ies)]."This thesis compares ISP98 with UCP500 in transfer and assignment. UCP500 Art.48 provides the rules for the transferable commercial letter of credit, which is somewhat similar to ISP98 rules 6.02 to 6.05. However, there is difference between commercial tranfer practice and standby letter of credit practice. UCP500 Art.48(g) indicates a transferable credit can be transferred once only while fractions of a transferable credit are not prohibited, which is contrary to ISP98 rule 6.02.As to Chapter Two, it is about the comparision of assignment of proceeds. ISP98 rule 6.06 is similar to UCP500 Article 49. Yet, the ISP contains detailed rules in ISP98 rules 6.07 through 6.10 regarding an assignment not contained in the UCP.Chapter Three indicates that contrasted with UCP500, ISP98 provides the transfer by Operation of Law, thus further perfecting the relevant systym.