What rule set governs the SLOC?
SLOCs are usually issued under ISP 98 (ICC Publication 590). In some jurisdictions, parties elect UCP 600. Rule selection is indicated in the credit text and binds all parties.
Which transactions are bankable?
Likely to qualify:
turnkey EPC contracts, project-linked performance obligations, commodity trade with confirmed off-take, secured import finance, and performance bonds where call risk is demonstrably low.
Unlikely to qualify:
speculative commodity positions, cryptocurrency-related trades, business involving sanctioned parties, and projects with unresolved environmental or licensing issues.
Why is minimal call risk important?
Issuing banks treat a standby LC as a secondary obligation. High expected call frequency increases capital allocation and can render a deal uneconomical.
Can we choose the issuing bank?
Preference can be indicated, but final selection depends on ticket size, jurisdiction, counter-party, and available credit lines. All issuers are regulated and clear through established correspondent networks.
Are retainer funds refundable if issuance fails?
No. The retainer covers third-party legal, valuations, and due-diligence expenses already incurred. Engagement proceeds only after both parties accept this cost allocation.
What happens if the contract value changes?
Amendments to an issued SLOC require consent from the issuing bank, any confirming bank, and the beneficiary, in line with UCP 600 Article 10. Additional underwriting and fees may apply.
How is compliance monitored?
Financely follows the Wolfsberg-ICC-BAFT Trade-Finance Principles and runs sanctions, AML, and adverse-media screening on all parties.