LAW OF THE KYRGYZ REPUBLIC

of July 23, 2002 No. 123

About letters of credit

Accepted by General Court of Jogorku Kenesh of the Kyrgyz Republic on June 11, 2002

Approved by the Meeting of national representatives of Jogorku Kenesh of the Kyrgyz Republic on July 3, 2002

Article 1. Subject of regulation of this Law

This Law establishes action in the territory of the Kyrgyz Republic of "The unified rules and customs for the documentary credits" prepared by International Chamber of Commerce (Uniform Customs And Practice For Documentary credits, UCP, ICC publication No. 500).

Article 2. The basic concepts used for the purposes of this Law

1. The letter of credit represents the conditional monetary commitment of bank issued to them at the request of the client for benefit of his partner under the agreement under which bank, the opened letter of credit (emitting bank), makes to the supplier payment or confers powers to other bank to make such payments on condition of submission of the documents provided in the letter of credit to them and in case of accomplishment of other conditions of the letter of credit.

In the stipulated cases payment by the performing bank can be guaranteed to the receiver by other bank (confirmatory bank). When the performing bank makes payments to the receiver (to person specified as "receiver") according to the letter of credit, emitting bank has the obligation to make the corresponding payment (plus remuneration of the performing bank) to the performing bank. If the performing bank does not make payment according to the obligations, the confirmatory bank has the obligation to make payment to the receiver (person specified by "receiver") provided that to the performing bank the required and properly processed documents were submitted.

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