Skip to main content

Navigating Non-Compliant Demands: A Guide to Corrections Under Demand Guarantees

Demand guarantees are crucial instruments in international trade, providing security and assurance to beneficiaries. However, the intricacies of these instruments can sometimes lead to discrepancies and non-compliant demands, causing delays and potential disputes. Fortunately, the International Standard Demand Guarantee Practice (ISDGP) provides clear guidelines on how to rectify such situations. Understanding Non-Compliance A demand is deemed non-compliant when it fails to adhere to the specific terms and conditions outlined in the guarantee. This could range from simple errors in documentation to more substantial deviations from the agreed requirements. When a guarantor identifies a non-compliant demand, they must reject it, triggering a process for potential correction. The Beneficiary's Right to Correct Crucially, the ISDGP acknowledges the beneficiary's right to rectify non-compliance. Even if the guarantee explicitly excludes Article 17(b), the beneficiary is still permit...
Post a Comment

About

Exportreview.com was founded by Mr. Nhem Ratha, a seasoned professional with over 15 years of experience in trade finance. Driven by a passion for sharing his expertise and empowering others in the international trade landscape, Mr. Ratha created Exportreview.com as a comprehensive resource for anyone interested in this dynamic field.

About the Founder: Mr. Nhem Ratha

Mr. Ratha boasts a distinguished career in trade finance management, having honed his skills over 15 years at a bank. His experience encompasses various trade finance facets, including trade product development, trade services, supply chain finance, core payments, AML/CFT, sanctions, and regulatory compliance. He holds a dual Bachelor's degree in English Communication and Business Administration, and has achieved numerous internationally recognized qualifications, including ACAMS,USA-CAMS and CGSS, LIBF, UK- QTFS, CDCS, CSDG, CITF, CTFC, CSCF, CSME, CertPay, and ICC Academy, Singapore- CTFP, GTC, EIC, and FTA, demonstrating a comprehensive understanding of the trade finance industry. Read more about Mr. Ratha HERE!

Our Mission and Vision

Export Review is dedicated to providing in-depth knowledge and resources on all aspects of international trade. Our mission is to empower individuals and businesses with the information they need to navigate the complexities of international trade with confidence. We envision ourselves as a leading source of reliable and insightful trade finance knowledge, fostering a community of informed professionals.

What We Offer

Export Review offers a wealth of valuable resources, including:

  • Informative articles covering trade finance, shipping and logistics, compliance and sanctions, and more.
  • Regular updates to ensure you have access to the latest industry trends and insights.
  • Learning materials to enhance your understanding of international trade concepts.

Whether you're a seasoned trade professional, a budding entrepreneur, or simply curious about the world of international trade, Export Review is your one-stop shop for valuable knowledge and learning opportunities.

Disclaimer

The information provided on Export Review is intended for general knowledge and educational purposes only and does not constitute financial or legal advice.

Comments

Post a Comment

Popular posts from this blog

The Principle of Independence in Demand Guarantees

Demand guarantees are a common tool used in international trade to provide assurance to the beneficiary that they will receive payment for goods or services rendered. These guarantees are often issued by banks and serve as a form of security for the beneficiary in the event that the applicant fails to fulfill their obligations. One of the key principles governing demand guarantees is the principle of independence. This principle dictates that a demand guarantee is separate and independent from the underlying transaction between the applicant and the beneficiary. In other words, the issuer's obligation to pay under the guarantee is not contingent upon the performance or non-performance of the underlying contract. This principle is enshrined in international standards such as the ICC Uniform Rules for Demand Guarantees (URDG 758), which explicitly state that a demand guarantee is subject only to its terms, whether expressly stipulated in the guarantee itself or incorporated by refere...
Post a Comment
Read more

Mitigating Risks in Transferring Banks under Letters of Credit

 Introduction: When engaging in international trade, letters of credit (LCs) play a crucial role in ensuring secure and efficient transactions. However, the process of transferring the L/C can expose both the transferring bank and the parties involved to certain risks. Mishandling or errors during the transfer can lead to claims and defenses against the transferring bank. In this article, we will explore the potential risks associated with transferring banks under letters of credit and discuss effective strategies to mitigate these risks. Understanding the Risks: 1. Documentation Errors: Incorrect or incomplete documentation can result in discrepancies that may trigger claims against the transferring bank. These errors can include discrepancies in quantity, quality, pricing, or even incorrect shipping dates. 2. Non-compliance with Terms: Failure to comply with specific terms and conditions outlined in the LC can lead to disputes between parties involved. This could arise from non-c...
Post a Comment
Read more

Protesting a bill due to non-payment in D/A collection

Protesting a bill due to non-payment in documentary collection can be a necessary step to mitigate the risk of non-payment by the Importer. Under the terms of documentary collection with delivery document against acceptance, there is always a possibility that the transaction may not work out as expected if the Importer fails to pay on the maturity date. In such cases, the Exporter's Bank, also known as the Remitting Bank, can instruct the Importer's Bank, or Collecting Bank, to protest the bill for non-payment or non-acceptance. However, it is important to note that the Collecting Bank is not obligated to follow these instructions. If the Collecting Bank decides to handle the protest instruction, they may issue a bill note. It is crucial to understand that the specifics of this note may vary depending on different jurisdictions. To note a bill, the Collecting Bank typically sends it to a public notary who will then re-present it to the Drawee (Importer) on the same day it was r...
Post a Comment
Read more

Understanding the Differences between Licenses Issued by OFAC and the Bureau of Industry and Security (BIS)

When it comes to international trade and commerce, various government agencies play a crucial role in regulating and overseeing transactions involving sensitive goods or countries. The Office of Foreign Assets Control (OFAC) and the Bureau of Industry and Security (BIS) are two such agencies within the United States government. This article aims to shed light on the key differences between licenses issued by OFAC and BIS, providing a comprehensive understanding of their respective roles in facilitating lawful trade. 1. Purpose and Scope: The primary distinction between OFAC and BIS lies in their areas of focus. OFAC primarily administers economic sanctions programs, while BIS focuses on export controls. OFAC licenses are typically issued to authorize transactions involving sanctioned countries or individuals, whereas BIS licenses pertain to exports of controlled goods, technologies, or services. 2. Jurisdiction: OFAC operates under the U.S. Department of Treasury, while BIS falls under...
Post a Comment
Read more

Detention in International Trade: Understanding the Holding or Delay of Goods/Cargo at Ports, Terminals, or Customs Facilities

In the realm of international trade, the smooth flow of goods and cargo is crucial for businesses to meet customer demands and maintain profitability. However, delays and detentions at ports, terminals, or customs facilities can disrupt supply chains, leading to financial losses and strained relationships between trading partners. This article aims to shed light on the concept of detention in international trade and explore its causes, impacts, and potential solutions. Understanding Detention in International Trade Detention refers to the holding or delay of goods or cargo beyond the agreed-upon timeframes at ports, terminals, or customs facilities. It occurs when shipments are unable to proceed due to various reasons such as administrative issues, documentation discrepancies, inspections, security concerns, congestion, labor disputes, or even natural disasters. Causes of Detention 1. Administrative Issues: Delays can occur due to administrative inefficiencies such as incomplete paperw...
Post a Comment
Read more

Bank Guarantees: Understanding the Charges and Key Considerations

Introduction A bank guarantee is a financial instrument issued by a bank on behalf of a customer (applicant) to a third party (beneficiary). It assures the beneficiary that the applicant will fulfill a specific contractual obligation. If the applicant fails to meet their obligation, the beneficiary can claim payment directly from the issuing bank.   Types of Bank Guarantees Bank guarantees are issued for various purposes and can take different forms, including: Performance Guarantees: Ensure the fulfillment of contractual obligations, such as construction contracts or supply agreements.     Bid Guarantees: Assure that the applicant will enter into a contract after winning a bid.     Advance Payment Guarantees: Protect the beneficiary in case the applicant fails to deliver goods or services after receiving an advance payment.     Payment Guarantees: Guarantee the payment of a specific sum to the beneficiary under certain conditions.   ...
Post a Comment
Read more

The Electronic Trade Documents Act 2023: Revolutionizing Key Documents in the UK

Introduction In an era where digitalization is transforming every aspect of our lives, it comes as no surprise that the world of trade and commerce is also undergoing a significant shift. The United Kingdom has taken a bold step towards embracing this change by introducing the Electronic Trade Documents Act 2023. This groundbreaking legislation aims to revolutionize key documents used in trade transactions, such as bills of exchange, promissory notes, bills of lading, ship's delivery orders, warehouse receipts, mate's receipts, marine insurance policies, and certain cargo insurance certificates. In this article, we will delve into the implications and benefits of this act for businesses and the wider economy. 1. Bills of Exchange Traditionally used as a means of payment in international trade transactions, bills of exchange are negotiable instruments that allow for deferred payment. The Electronic Trade Documents Act 2023 enables these documents to be created, signed, transferr...
Post a Comment
Read more
Verification: 1d2ab820366ee419