Standby L/C Question, Need help from International Business Experts!?

Question

A standby l/c was opened in Singapore. The beneficiary stated on the letter is a bank in the US. Who should receive the original of the l/c? If the person in Singapore who applied for the l/c (who is not the beneficiary) asks the bank to give him the original so he can mail it to the US bank (the beneficiary), can the Singapore bank do so? Should such a request be in writing on the l/c itself?

Answer 1

It's probably not a standby letter of credit, but rather, a documentary letter of credit. Try this website, as it should answer most of your questions. Be sure to review the entire site, including the glossary of terms pages (plural)...

http://www.creditmanagementworld.com/letterofcredit.html

Answer 2

A standby letter of credit is usually opened to establish a line of credit for a business or company- for purchasing capital equipment, or operating expenses.
What you are describing sounds to me more like a confirmed, irrevocable letter of credit. This type is L/C is the most often used instrument of financing.
Just so we are clear, a letter of credit (of any type) is not a guarantee of payment. A letter of credit deals with PAPERWORK instead of goods, products, or services. It is a means of FINANCING.
Look for letter of credit information provided by THE INTERNATIONAL CHAMBER OF COMMERCE. This is the international authority for the establishment of regulations for letters of credit.