Assignment of proceeds and transfer in letters of credit, bank payment obligations and demand guarantees

Independent payment obligations, including letters of credit (LCs), bank payment obligations (BPOs) and demand guarantees (DGs) have made a tremendously useful contribution to world trade through their unique features including a documentary or data-oriented, independence principle. However, it is an irrefutable fact that all of them require vast sums of money to be issued and are time-consuming processes; consequently, the feature preventing traders from plunging into those costs is the most popular one and it is an ability to be transferred or assigned. To explain, merchants, instead of requesting the issuance of a new instrument, can transfer the instrument they have already have so as to save both time and money.