ISP98-STANDBY

ISP98 Standby ICC Publication 590 standby L/C rules.

Definition

ISP98 structure: 10 Rules + 89 Sub-Rules + Glossary: (1) Rule 1 General Provisions (scope, subject, interpretation, conflicts). (2) Rule 2 Obligations (independence, irrevocability, document-only, strict compliance). (3) Rule 3 Presentation (electronic + paper, identification, delivery, completeness, examination, non-conforming, demand, draw). (4) Rule 4 Examination (independent issuer, documentary compliance, documents independent of others, examination period 3 banking days reasonable). (5) Rule 5 Notice (Discrepancy + Refusal + Honor + Preclusion + Wrongful Honor). (6) Rule 6 Transfer (in entirety only, transferable specified). (7) Rule 7 Cancellation (irrevocable except party consents). (8) Rule 8 Reimbursement (issuer reimbursed by applicant). (9) Rule 9 Timing (banking days, hours, expiration, force majeure 30 days suspension). (10) Rule 10 Syndication + Participation. Key differences vs UCP 600: (a) ISP98 explicit support for electronic presentation (Articles 1.10 + 3.06), (b) Examination period 3 banking days ISP98 vs 5 banking days UCP 600, (c) ISP98 allows transfer in entirety only (UCP 600 allows partial transfer of transferable L/C), (d) ISP98 force majeure 30 days suspension (UCP 600 silent on duration), (e) ISP98 detailed default + Wrongful Honor + Wrongful Dishonor remedies clear, (f) ISP98 supports common standby uses (Performance + Financial + Direct Pay + Counter-Standby etc.). Adoption: ~50% global standby volume subject ISP98 (US banks predominantly + multinationals), ~50% UCP 600 (European banks + Asian banks predominantly).

Origin

ISP98 published 1998 by ICC + IIBLP ; ICC Publication 590 ; effective 1999 ; widely adopted US banks + multinationals 2000+.

Example in context

US technology supplier signs supply contract with German automotive OEM USD 100M ; OEM requires Financial Standby Letter of Credit USD 10M (10% of contract value, payment guarantee for ongoing supplies): supplier's bank Citibank New York issues MT760 SBLC USD 10M subject ISP98 (rather UCP 600 because designed for standby) to Deutsche Bank Frankfurt for OEM beneficiary ; if supplier defaults shipping, OEM presents draw + statement of default within 3 banking days Citibank reviews + honors.

Related terms

• Standby LC — governed instrument.
• UCP 600 detail — alternative rulebook.