[Code of Federal Regulations]

[Title 12, Volume 6]

[Revised as of January 1, 2006]

From the U.S. Government Printing Office via GPO Access

[CITE: 12CFR614.4720]



[Page 140-141]

 

                       TITLE 12--BANKS AND BANKING

 

                 CHAPTER VI--FARM CREDIT ADMINISTRATION

 

PART 614_LOAN POLICIES AND OPERATIONS--Table of Contents

 

Subpart Q_Banks for Cooperatives and Agricultural Credit Banks Financing 

                           International Trade

 

Sec. 614.4720  Letters of credit.



    Banks for cooperatives and agricultural credit banks, under policies 

adopted by their boards of directors, may issue, advise, or confirm 

import or export letters of credit in accordance with the Uniform 

Commercial Code, or the Uniform Customs and Practice for Documentary 

Credits, to or on behalf of its customers. In addition, as a matter of 

sound banking practice, letters of credit shall be issued in conformity 

with the list which follows.

    (a) Each letter of credit shall be in writing and shall 

conspicuously state that it is a letter of credit, or be conspicuously 

entitled as such.



[[Page 141]]



    (b) The letter of credit shall contain a specified expiration date 

or be for a definite term.

    (c) The letter of credit shall contain a sum certain.

    (d) The bank's obligation to pay should arise only upon fulfilling 

the terms and conditions as specified in the letter of credit. The bank 

must not be called upon to determine questions of fact or law at issue 

between the account party and the beneficiary.

    (e) The bank's customer should have an unqualified obligation to 

reimburse the bank for payments made under the letter of credit.

    (f) All letters of credit shall be irrevocable.



[46 FR 51879, Oct. 22, 1981, as amended at 55 FR 24887, June 19, 1990; 

62 FR 4445, Jan. 30, 1997; 64 FR 43049, Aug. 9, 1999]