Document background
Letters of Credit and Standby Letters of Credit are essential banking instruments used in international trade and financial transactions, providing payment security and risk mitigation for parties involved. These documents, when governed by Swiss law, combine the reliability of Switzerland's banking system with international standards such as UCP 600 and ISP98. They are particularly utilized when parties seek a secure payment mechanism in cross-border transactions, with the issuing bank providing an irrevocable commitment to pay upon presentation of compliant documents. The Swiss jurisdiction offers robust legal protection and regulatory oversight through FINMA, making these instruments highly reliable and internationally respected. The document serves various purposes, from securing payment in trade transactions (traditional LC) to providing performance security (Standby LC), and includes detailed terms for document presentation, payment conditions, and validity periods.
