Recently, the Urumqi office of Dacheng advised Xinjiang branch of Agricultural Development Bank of China (“ADBC”) on the issuing of overseas standby letter of credit.

By issuing the standby letter of credit as a form of guarantee, ADBC Xinjiang branch aimed to support the overseas expansion and growth of a leading enterprise from Xinjiang that was seeking finance from a Los Angeles-based bank.  Partner Ma Yan from Urumqi office’s international practice department advised ADBC on risk prevention in relation to the issuing of the standby letter of credit.

On the basis of relevant regulations and international conventions regarding international letter of credit, Ma advised ADBC on the legal features of standby letter of credit, responsibilities and risks of the issuing bank, risk prevention measures the issuing bank should adopt, key points in drafting standby letter of credit and wording of the key points in the letter of credit.