| In order to control international trade risk effectively,standby letter of credit and the concept of independent guarantee come into being.Standby letter of credit origins in America so as to circumventing the law which prohibits bank issuing guarantees.At first,standby letter of credit was mainly used in America and independent bank guarantee in Europe.But now,it has been widely used in international business all over the word.The International Chamber of Commerce,on the basis of Uniform Customs and Practice for Documentary Credits(UCP) and United Nations Convention on independent Guarantees and Standby Letter of Credit,promulgated officially International Standby Practices in 1998(ISP98) to stipulate uniformly the legal systems and operation procedures concerning standby letter of credit.This essay will introduce the rules of standby letter of credit and the basic operation process of it in the first chapter.Also,this chapter will compare it with other instrument of international payment so as to point out the principles of standby letter of credit,The following chapter will analyze the rights and responsibilities of the related parties of standby letter of credit.In addition,this essay will illustrate the legislation of standby letter of credit in China,focus on the problems existed and raise the author's proposals and suggestions on these problem.As China plays a more and more important role in international business,standby letter of credit will be more often in both foreign-related and home trade.Although standby letter of credit is pretty complicated and unique in its own legal systems,the study of its legal systems has not yet been made both comprehensively and profoundly in China.The concept of independent guarantee is quiet ambiguity in jurisdiction。Therefore,enhancement of the study of standby letter of credit is of great importance for the practice in either international or home business trade as well as normalization of the practice of standby letter of credit.
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