Letter of Credit Forum

I am writing a couple of articles on international law and hence make available to you The Law of Documents of Air Carriage (available in the articles section). I hope it is not too academic (that is verbose and useless). If you do not like it, please feel free to let me know in a forum post, since it will help me to improve. Readers who enjoy the article, unfortunately will be less helpful to better my scribblings. 

Originally, I had conceived of the site with a very plain interface like google or craigslist. However, I have come to modify my view, introducing imagery to please the eye without distracting the focussed mind. 

Enjoy. 

If an issuing bank empowers a nominated bank to examine and
honor documents under an LC  the issuing
bank has to reimburse the secondary bank. Two ways of reimbursement are
available:

1. Direct reimbursement by the Issuing Bank
2. Indirect reimbursement by a third party bank
   which the Issuing Bank has authorized to reimburse the secondary bank.

Standby letters of credit are bank guarantees. However, since passing of the Glass-Steagal Act in 1932, American banks were separated in commercial and investment banks where commercial banks were not permitted to issue guarantees. 

To overcome this competitive disadvantage, Amercian banks circumvented the Glass-Steagal Act by issuing letters of credit, where the beneficiary only had to demand payment but not present commercial documents. Glass-Steagal was repealed in 1999, however, banks continued to offer standbys since their clientele was used to them. 

Even though the payment
obligation under a letter of credit is independent of the underlying
transaction, courts and the law have recognized, that if the beneficiary
defrauds the applicant, banks need not pay. Originally this doctrine was
developed in the case of Sztejn, now the Uniform Commercial Code (UCC) in its
Article 5 ruling which deals with letters of credit, has incorporated the Sztejn

The following graph shows the search volume globally for the term "letter of credit". As one can clearly see, there is a steady decline. I expected to see a drop after the financial crisis, reflecting a general slowdown in international business. However, the decline has been going on steadily over time.