www.Ghlolo.com
The Seller (Beneficiary) must carefully check, verify, and document all of the following upon receiving an SBLC from the buyer (Applicant).
Note:
An SBLC is a banking commitment, and its precise wording (Verbiage) determines its enforceability and risk level.
Before accepting any SBLC, its text must be reviewed by a financial advisor or banking legal counsel.
────────────────────────────
1) Fundamental Principles and Conditions to be Guaranteed
- Type of SBLC
It must be an Irrevocable, Unconditional, On-Demand Standby Letter of Credit. - Method of Communication
The SBLC must be issued solely via MT760.
Do not accept an MT799 as a substitute. - Issuing Bank
Conduct a thorough check:
Full name, SWIFT/BIC, credit rating, country, history of issuing SBLCs.
In case of risk, require Confirmation by an international bank. - Advising / Confirming Bank
Request that the SBLC be advised (and preferably Confirmed) through a reputable bank. - Amount and Currency
A precise and fixed amount (USD/EUR) without any range or ambiguity. - Expiry Date
A specific and explicit date.
Suggestion:
Expiry = End of contract performance + 90 to 180 days.
Avoid Evergreen / Auto-Rollover clauses without clear terms
