Document background
The Counter Standby Letter of Credit is a crucial financial instrument in international banking and trade, particularly under Swiss law which is renowned for its robust banking regulations and financial sector stability. This document is typically used when a bank needs to provide a counter-guarantee to another bank that has issued a primary Standby Letter of Credit, creating a back-to-back guarantee structure. The Counter Standby Letter of Credit includes specific terms for reimbursement, drawing conditions, validity periods, and compliance requirements with both Swiss banking regulations and international banking practices. It's commonly used in complex international transactions where multiple jurisdictions and parties are involved, providing an additional layer of security and risk mitigation for international trade and project finance transactions. The document must comply with Swiss federal banking laws, anti-money laundering regulations, and typically references international banking standards such as ISP98 or UCP 600.
