Electronic letter of credit and bank payment obligation as an alternative to a documentary letter of credit

Abstract

This article examines the electronic letter of credit and bank payment obligation (BPO) as a possible alternative to a documentary letter of credit. The author underlines such advantages of these tools as larger security, increased speed and lower transaction costs, for sending documents, the uniform rules of the ICC for these instruments. Examples of utilization of these instruments in international trade are provided. It is concluded that at the moment, Russian banks are not ready to use electronic letter of credit and BPO due to the lack of legal framework and established practices.