Counter Standby Letter Of Credit for Australia

Counter Standby Letter Of Credit Template for Australia

A Counter Standby Letter of Credit is a specialized banking instrument governed by Australian law that serves as a secondary guarantee to a primary Standby Letter of Credit. This document represents a bank's commitment to reimburse another bank that has issued a primary Standby Letter of Credit, effectively providing a back-to-back guarantee arrangement. The document incorporates provisions compliant with Australian banking regulations while adhering to international banking practices, including ISP98 and UCP 600 rules. It details the terms, conditions, drawing requirements, and obligations of all parties involved in the counter-guarantee arrangement.

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What is a Counter Standby Letter Of Credit?

The Counter Standby Letter of Credit is a crucial instrument in international banking and trade finance, particularly when multiple banking institutions are involved in providing guarantees. This document is typically used when a bank requires additional security or counter-guarantee from another bank before issuing a primary Standby Letter of Credit. Under Australian law, the Counter Standby Letter of Credit establishes the legal framework for one bank to reimburse another bank that has issued a primary Standby Letter of Credit, effectively creating a back-to-back guarantee structure. The document includes specific provisions for drawing conditions, expiry dates, applicable rules and regulations, and compliance requirements with both Australian banking laws and international banking standards. It's particularly relevant in scenarios involving cross-border transactions, large infrastructure projects, or when local banks need support from international banking institutions.

What sections should be included in a Counter Standby Letter Of Credit?

1. Issuing Bank Details: Full legal name and address of the bank issuing the Counter Standby Letter of Credit

2. Reference Information: CSBLC number, date, and reference to the primary Standby Letter of Credit

3. Beneficiary Details: Complete details of the beneficiary bank (issuer of the primary Standby Letter of Credit)

4. Applicant Details: Full information of the party requesting the Counter Standby Letter of Credit

5. Amount and Currency: Maximum amount and currency of the counter guarantee

6. Effective Date and Expiry: Clear statement of when the CSBLC becomes effective and its expiration date

7. Drawing Terms: Specific conditions and documentation required for drawing under the CSBLC

8. Governing Law Declaration: Statement that the CSBLC is governed by Australian law

9. Applicable Rules: Reference to applicable international rules (typically ISP98 or UCP 600)

10. Bank Authorization: Authorized signatures and authentication details from the issuing bank

What sections are optional to include in a Counter Standby Letter Of Credit?

1. Automatic Extension Clause: Used when the CSBLC needs to include provisions for automatic extension periods

2. Transfer Rights: Include when the CSBLC needs to be transferable to other beneficiaries

3. Partial Drawings: Include when multiple partial drawings are to be permitted

4. Electronic Presentation: Include when electronic presentation of documents is acceptable

5. Force Majeure Provisions: Additional provisions for force majeure events affecting the CSBLC

6. Anti-Money Laundering Compliance: Include when specific AML compliance requirements need to be highlighted

7. Multiple Currency Provisions: Include when drawings can be made in multiple currencies

What schedules should be included in a Counter Standby Letter Of Credit?

1. Schedule A - Form of Demand: Standard format for making a demand under the CSBLC

2. Schedule B - Required Documents: Detailed list of documents required for drawing

3. Schedule C - Bank Charges and Fees: Schedule of applicable banking charges and fees

4. Appendix 1 - Primary SBLC Reference: Copy or key details of the primary Standby Letter of Credit being counter-guaranteed

5. Appendix 2 - Authentication Procedures: Detailed procedures for authenticating drawing requests and communications

6. Appendix 3 - Communication Methods: Approved methods and details for communications between parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use
Clauses
Relevant Industries

Banking and Financial Services

International Trade

Construction and Infrastructure

Energy and Resources

Manufacturing

Import/Export

Shipping and Logistics

Mining

Commercial Real Estate

Telecommunications

Relevant Teams

Trade Finance

International Banking

Corporate Banking

Legal

Compliance

Risk Management

Treasury

Operations

Credit Administration

Documentary Credits

Relevant Roles

Trade Finance Manager

Banking Operations Director

Letter of Credit Specialist

International Banking Officer

Corporate Banking Manager

Treasury Manager

Risk Management Officer

Compliance Officer

Financial Controller

Banking Relationship Manager

Documentary Credits Manager

Senior Credit Officer

Trade Finance Operations Manager

Banking Legal Counsel

Chief Financial Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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