scholarly journals LEGAL NATURE OF THE INTERNATIONAL DOCUMENTARY LETTER OF CREDIT

Author(s):  
Giorgi Amilakhvari
Author(s):  
Igor Tovkun ◽  
Liliyа Menkova

Problem setting. Modern global economy is characterized by significant integration. In this regard, it becomes widespread cooperation between business entities located in different countries. Foreign economic activity of such entities is profitable, but at the same time complex activity with increased risk. Therefore, in the conclusion of the foreign trade agreement, in the process of harmonizing obligations, it is important to establish the most profitable interests of both exporter and importer. One of the main elements in carrying out foreign economic contracts is mutual settlements between the parties, that is, residents of different countries, which are called international calculations. Integrated research of advantages and disadvantages of using certain documentary forms of international settlements becomes increasingly relevant and needs considerable attention. This in turn will enable Ukraine’s business sector to effectively conduct foreign economic activity, to establish trust relations with foreign partners from different countries. Target research. The aim of the article is illumination the essence of documentary forms of international calculations used in modern foreign economic activity, establishing the advantages and disadvantages of their use, the formation of criteria for their effectiveness for subjects that carry out foreign economic activity, as well as consideration of issues of use of such forms of Ukrainian business entities. Analysis of the last researches and publications. The question of organization and forms of international calculations in the scientific works was examined by such foreign and home scientists V. V. Kozyk, N. M. Tiurina, N. S. Karvatska, O. V. Vasiurenko, V. V. Diachek, O. D. Kolosovska, V. S. Onishchenko , N. V. Kudlaieva and others. Article’s main body. World practice determines that international settlements are carried out in relevant forms that are conventionally divided into documentary and undocumented. Documentary forms of calculations are the letter of credit and collection. Up to 80% of payments in world trade is carried out using a letter of credit. In view of this, the authors in this article have identified the legal nature of documentary forms of calculations used in foreign economic relations, considered the advantages and disadvantages of such documentary forms of calculations as a letter of credit and collection, implemented a comparative analysis of forms calculations among themselves, and also analyzed the legislation and issues of use of these forms of Ukrainian entities of foreign economic management. Conclusions and prospect of development. The choice of parties to the foreign economic agreement of the optimal documentary settlement is an important condition for strengthening the financial and economic independence of the enterprise. In view of this, the importer so exporter should provide and take into account all the benefits and disadvantages of the use of a particular form of documentary calculations during foreign economic activity. Concerning the letter of credit, the most important problem of its application in Ukraine is the lack of confidence in Ukrainian banks by foreign partners because the latter establish such conditions for servicing letters of credit, which are often unacceptable for Ukrainian banks. Therefore, in order to effectively exist and develop Ukrainian banks in the world market, we believe that the state needs to improve the system of international settlements in line with current trends and improve the image of both Ukrainian companies and banks. This can be achieved through the use of tools to improve legislation in the settlement and credit sphere and the formation of an information base on solvency and reliability of Ukrainian and foreign companies, banks and their partners.


Lex Russica ◽  
2019 ◽  
pp. 48-56
Author(s):  
L. G. Efimova

The article analyzes the concept and legal nature of a transferable letter of credit in the comparative legal aspect. The author compares the legal structure of a transferable letter of credit under the civil code with the legal regulation of a transferable letter of credit under the Uniform Customs and Practice for Documentary Credits (UCP) (2007 edition, ICC publication No. 600).Under the law, transferable letters of credit mean such letters of credit that the payer (applicant) and/or issuing Bank allowed to transfer to the second beneficiaries. The transfer of the letter of credit is executed in two transactions. First, the first beneficiary shall unilaterally declare his will addressed to the transferring Bank where the first beneficiary shall propose to the Bank to change the range of possible beneficiaries under the letter of credit. The will of the first beneficiary should be qualified as a unilateral transaction on behalf of the first beneficiary concerning the full or partial exemption of the issuing Bank (confirming Bank) from the original offer (opening of the letter of credit), if the transfer of the letter of credit to the second beneficiaries is made. Second, a transferring Bank makes a unilateral transaction to transfer the letter of credit to the second beneficiaries. This transaction is made by the transferring Bank on behalf, at the expense and in the interests of the issuing Bank (confirming Bank) on the basis of the authority granted under terms of the letter of credit. A unilateral transaction of the transferring Bank concerning the transfer of a letter of credit is an offer made on behalf of the issuing Bank (confirming Bank), and brought to the attention of the second beneficiaries (beneficiary) with a proposal to conclude a contract for the payment (acceptance and payment of a bill of exchange) against the relevant financial and/or commercial documents.At the same time, the transfer of the letter of credit leads to a change in the original offer to open a letter of credit to the first beneficiary in terms of a range of possible future acceptors.


2005 ◽  
Vol 28 (4) ◽  
pp. 861-896
Author(s):  
Pierre-Paul Côté

Commercial credit has been given many different forms over the years and the various financial instruments are being constantly refined. By the same token, loan agreements have become increasingly complex documents. The main thrust of this paper is to examine the legal nature, legality and usefulness of a number of financial instruments and clauses usually found in a typical agreement, in the light of basic civil law rules and principles. The first part of this paper deals with a number of financial instruments, namely the open credit agreement, the banker's acceptance, the letter of credit and the letter of guaranty. Secondly the author analyses the typical loan agreement focusing on the convenant 'sfundamentals elements and discussing its relationship with the use of sureties. In particular, two civil law mechanisms that are of some interest in connection with the loan agreement namely novation and subrogation are examined. The third and fourth parts of this paper deal with a number of standard clauses in the open credit and loan agreements.


1990 ◽  
Vol 2 (4) ◽  
Author(s):  
Christoph Paulus
Keyword(s):  

Ein paar amerikanische Entscheidungen jüngeren Datums haben eine Gefährdung des konkursrechtlichen Grundsatzes der Gleichbehandlung aller Gläubiger offengelegt. Wenn sich nämlich ein Gläubiger innerhalb der kritischen Zeitspanne einen standby letter of credit ausbedingt und diesen nach Eröffnung des Konkursverfahrens über das Vermögen des Schuldners von dessen Bank honoriert erhält, erlangt er volle Befriedigung zu Lasten der Konkursgläubiger; denn die Bank kann sich in aller Regel aus ihren vorhandenen Sicherheiten befriedigen. Die anfechtungsrechtlichen Probleme ergeben sich vornehmlich aus der Mittelbarkeit der Zuwendung an den Gläubiger. Der nachfolgende Beitrag zeigt, wie die amerikanischen Gerichte diese Fälle lösen und wie sie nach deutschem (geltenden und zukünftigen) Recht zu entscheiden wären. Darüber hinaus wird die Frage erörtert, nach welchem Recht eine Konkursanfechtung durchzuführen ist, wenn der standby letter of credit über die nationalen Grenzen hinaus ausgestellt wird


2017 ◽  
Vol 52 (4) ◽  
pp. 27-52
Author(s):  
Nam-Seok Hwang
Keyword(s):  

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