A Study On Legal Status Of The Issuer Under ISP98

In order to control the credit risk, Standby Letter of Credit as a guarantee tool in the form of Letter of Credit is extensively applied in international economic activities. Nowadays, the International Standby Practices (ISP98) has become the first selected rule for applying Standby Letter of Credit by the parties in international trade. The number of Standby Letter of Credit applied ISP98 is increasing year by year in our country. Since the financial institutions as the issuer have different comprehension about the legal relationship between the issuer and other parties, and the rights and obligations of issuer under the ISP98. It brings some inconvenience to banks for operating Standby Letter of Credit. We should research the legal status of issuer under ISP98, define the rights and obligations of issuer to promote the operation of business transaction.The article starts with the birth and development of Standby Letter of Credit, dissertates the legal attribute of the Standby Letter of Credit, points out that it is a special Letter of Credit. And define the legal status of issuer as an independent guarantor. On the basis of the respective analysis of different relationships between issuer and applicant, beneficiary, and other parties, compared with the rule of Uniform Customs and Practice for Documentary Credits (UCP500), United National Convention on Independent Guarantees and Standby Letters of Credit, it analyzes the issuer's reimbursement right, dishonor right, careful examination of documents obligation, honor obligation, advice obligation, and charges and payments obligation. The obligation of issuer is the center of gravity of this paper. At last, the article combines the bank practices with the theory analysis, especially the comment of foreigner experts of Letter of Credit, and puts forward the preliminary proposals of bank practices.