ICBPO (Irrevocable Conditional Bank Pay Orders) are now banned and have been made illegal by most governments. BG and SBLC Issuers that continue to ask for ICBPOs as payment are completely out of touch by seeking a form of financial payment that has been made illegal in most countries. Any supplier that requests payment by ICBPO clearly doesn’t understand the Bank Guarantee Industry and is an amateur not a professional. You can’t be a credible financial supplier and request your customers pay you using illegal means eg ICBPO.

So why have most governments banned and made ICBPOs illegal?
Answer: When an ICBPO (Irrevocable Conditional Bank Pay Orders) for 500 Million Dollars is lodged with a Bank in Country A to “Irrevocably” pay a Bank in Country B. The National Balance of Payments Accounts in BOTH Countries is affected!

Country A incurs a 500 Million Dollar Balance of Payments Debit (Deficit) and Country B receives a 500 Million Dollar a Balance of Payment Credit. This immediately affects BOTH countries National Debt Balance Sheets and can also have an effect on the countries exchange rate because of the sheer size of the transaction.

The the above action occurs immediately when the Bank Pay Order is written because the Bank Pay Order is “Irrevocable” meaning it cannot be cancelled.
The situation gets worse when Bank A issues the ICBPO for 500 Million but Bank B doesn’t deliver the Bank Guarantee and defaults on the transaction…. This leaves Bank A unable to cancel their ICBPO or recover their 500 Million Dollar payment for a transaction that did not occur. AND Leaves Country A with a 500 Million Dollar Deficit when no goods or services were transacted!

Most Governments have now recognized the extreme risk and effect ICBPOs have on their economies and as a result they have banned them and made ICBPOs illegal for all parties except for very large specially licensed financial institutions that have been given direct government approval. Those institutions are few and far between and rarely operate in the Bank Guarantee Industry. So ICBPOs are well and truly off the Bank Guarantee menu!
 
The RWA is ALWAYS followed by MT760. If the client is not okay with an escrow in The United States and is also not okay releasing 2% after MT799 RWA has been issued using his own chosen verbaige, then I really do not think he is serious about getting an instrument. Our firm does not encourage upfront fee transactions, but if your client is willing to pay the transmission fee for the MT799 and MT760 upfront, then we could have a way out. If not your client will have to source elsewhere


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