11.7.6　Standby Letter of Credit备用信用证

A standby letter of credit,as the name indicates,is a standby,meaning that it is a credit that is ready to be used when needed,but the credit is “called on”only in the worst-case scenario—the importer defaults or delays on payment.It usually has a much longer validity period,sometimes longer than a year to meet the needs of an exporter who makes a series of shipments to a customer.This eliminates the need for opening a new credit for each shipment over a relatively longer period.The usage for standby letter of credit is regulated by the International Stand-By Practices(ISP 98).