Bishkek  

July 23, 2002 # 123 

THE LAW OF THE KYRGYZ REPUBLIC  

On the letter of credit 

Article 1. Subject of regulation of this Law  

This Law establishes the effect in the territory of the Kyrgyz Republic “Uniform Customs and Practice for Documentary Credits”, prepared by the International Chamber of Commerce (Uniform Customs And Practice For Documentary credits, UCP, ICC publication No. 500). 

Article 2. Main concepts used for purposes of this Law  

1. The letter of credit is a double bond of a bank issued to them on behalf of a client in favor of its counterparty to the agreement on which the issuing bank (issuing bank), makes payment to the deliverer, or authorizes another bank to make such payments, provided that the documents it provided the letter of credit and execution other conditions of the letter of credit. 

In specified cases, payment to a recipient by the designated bank can be guaranteed by another bank (confirming bank). When the designated bank makes payments to the recipient (a person named as the “recipient”) in accordance with the letter of credit, the issuing bank has the obligation to make the corresponding payment (plus fee of the designated bank) to the designated bank. If the designated bank does not make a payment in accordance with its obligations, the confirming bank has an obligation to make a payment to the recipient (a person named as the “recipient”), provided that the designated bank and submitted the required and properly executed documents. 

2. Rules of the International Chamber of Commerce (hereinafter - the ICC Rules) “Uniform Customs and Practice for Documentary Credits”, prepared by the International Chamber of Commerce, as amended in 1993 or a later version, as well as any other document that changes the provisions of the ICC Rules, which can subsequently be published by the International Chamber of Commerce (or its assignee). 

Article 3. Applicable law  

1. The legal relations under letters of credit are governed by the Civil Code of the Kyrgyz Republic, this Law and other laws and normative legal acts of the Kyrgyz Republic, issued on the basis of and in accordance with, as well as international agreements under the legislation of the Kyrgyz Republic.  

2. In the absence of the letter of credit references to the law to be applied by the letter of credit, use of the provisions of the ICC Rules. In case of dispute, involving the translation of the ICC Rules in the Russian language will be applied the English version, which is the original.  

3. The provisions of the ICC Rules do not apply in whole or in part:  

а) if the letter of credit is not in accordance with the ICC Rules as a whole, and in relation to some of its provisions;  

b) when conditions of the letter of credit is otherwise in conflict with the provisions of the ICC Rules.  

4. The letter of credit opened by the resident bank of the Kyrgyz Republic, should be considered in both form and content, in accordance with the legislation of the Kyrgyz Republic, if in accordance with article 1198 of the Civil Code of the Kyrgyz Republic in the letter of credit will not be stated that it is regulated by other laws.  

Regardless of the law to be applied by the letter of credit in the case of opening the letter of credit by the resident bank of the Kyrgyz Republic on behalf of a client, the designated bank or a bank involved in the conduct of the letter of credit operation, or the recipient (or a person designated by the recipient), in addition to any other remedies that will be the case, is entitled to apply to the courts of the Kyrgyz Republic, if there is a dispute concerning the validity of the letter of credit, the conditions of its execution or any other matter. 

Article 4. Form and conditions of the letter of credit  

1. All letters of credit must include the word “letter of credit”. In the case of opening a letter of credit: 

- in Kyrgyz and Russian languages ​​to be used the word “letter of credit”; 

- in English language to be used words “letter of credit” or “documentary credit”; 

- in another foreign language to be used the appropriate terminology defined by the legislation.  

When opening the letter of credit in both English and another foreign language text of the letter of credit in the English version shall prevail.  

2. Any of the parties to the letter of credit (payer, issuing bank, executing bank, recipient and any person designated by the recipient) may by agreement among themselves to determine the conditions of the letter of credit. In cases of incomplete definition of the parties conditions of the letter of credit apply, provided by the ICC Rules. 

3. When opening the letter of credit must be observed minimum requirements for the form and the conditions of the letter of credit by the Civil Code of the Kyrgyz Republic, this Law, other laws, normative legal acts of the Kyrgyz Republic and the ICC Rules. 

Article 5. Obligations of parties on the letter of credit  

1. Issuance of the letter of credit in accordance with the legislation of the Kyrgyz Republic establishes the rights and obligations between the parties, which may be exercised by the courts in the Kyrgyz Republic.  

The issuing bank is liable under the letter of credit simply because it opens the letter of credit, the confirming bank is liable under the letter of credit simply because it confirms the payment. The responsibility of these banks does not require any form of acceptance or confirmation of the executive bank or the recipient of the letter of credit. 

2. According to the letter of credit, all participating banks have an obligation to make payments in accordance with the letter of credit, provided that the documents submitted by the recipient, are documents that are defined in the letter of credit. In this case, none of the parties of the letter of credit may not refuse to make payments with reference to any external factors, such as a default or breach by the recipient, any obligation under the letter of credit (including the recipient's obligation to deliver the goods or to deliver goods that meet the requirements of a particular quality), and no one of the parties will be able to refuse of their obligations under the letter of credit, other than those specified in the letter of credit or consistent with articles 782-788 of the Civil Code or the ICC Rules. 

In case of violation of such obligations, the parties will have the appropriate rights in accordance with the agreement or the legislation, of which the liability arose. 

President of the Kyrgyz Republic A.Akaev   

Adopted by the Legislative Assembly of the 

Jogorku Kenesh of the Kyrgyz Republic June 11, 2002   

Approved by People's Representative's Chamber 

of the Jogorku Kenesh of the Kyrgyz Republic July 3, 2002.