• Korea Trade Review
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• v.43 no.6
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• pp.25-50
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• 2018

It is an undeniable fact that the counter-guarantees are always exposed to wrongful or fraudulent demands for payment due to its institutional hallmarks and simplicity. Generally counter-guarantees are payable by presenting a written statement indicating that the local guarantor was in receipt of the beneficiary's statement that the principal was in breach of the underlying contract without any proof of any default. No proof of actual payment of guarantee is required. These matters may lead to numerous disputes or conflicts between the parties concerned. These problems raise may legal issues such as a guarantor(or a counter-guarantor)'s dishonor, the wrongful or fraudulent demands for payment, and the fraudulent conspiracy or the acquiescence of the local guarantor in the course of the procedural demand for payment. On the other hand, the guarantor's dishonor or an injunction are sometimes misused as dispute resolution method between parties involved. Therefore, this research analyzed the guarantor's wrongful dishonor and related issues such as an injunction, fraud exception, and others under the counter-guarantee regime focusing on the relevant cases. This paper also suggested practical implications and countermeasures from a business point of view.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.69
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• pp.261-301
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• 2016

Recently the abusive calls on on-demand bonds have been a critical issue among many engineering and construction companies in Korea. On-demand bond is referred to as an independent guarantee in the sense that the guarantee is independent from its underlying contract although it was issued based on such underlying contract. For this reason, the issuing bank is not required to and/or entitled to look into whether there really is a breach of underlying contract in relation to the call on demand-bonds. Due to this kind of principle of independence, the applicant has to run the risk of the on demand bond being called by the beneficiary without due grounds. Only where the call proves to be fraudulent or abusive in a very clear way, the issuing bank would not be obligated to pay the bond proceeds for the call on on-demand bonds. In order to prevent the issuing bank from paying the proceeds under the on-demand bond, the applicant usually files with its competent court an application for injunction prohibiting the beneficiary from calling against the issuing bank. However, it is in practice difficult for the applicant to prove the beneficiary's call on the bond to be fraudulent since the courts in almost all the jurisdictions of advanced countries require very strict and objective evidences such as the documents which were signed by the owner (beneficiary) or any other third party like the engineer. There is another way of preventing the beneficiary from calling on the bond, which is often utilized especially in the United Kingdom or Western European countries such as Germany. Based upon the underlying contract, the contractor which is at the same time the applicant of on-demand bond requests the court to order the owner (the beneficiary) not to call on the bond. In this case, there apparently seems to be no reason why the court should apply the strict fraud rule to determine whether to grant an injunction in that the underlying legal relationship was created based on a construction contract rather than a bond. However, in most jurisdictions except for United Kingdom and Singapore, the court also applies the strict fraud rule on the ground that the parties promised to make the on-demand bond issued under the construction contract. This kind of injunction is highly unlikely to be utilized on the international level because it is very difficult in normal situations to establish the international jurisdiction towards the beneficiary which will be usually located outside the jurisdiction of the relevant court. This kind of injunction ordering the owner not to call on the bond can be rendered by the arbitrator as well even though the arbitrator has no coercive power for the owner to follow it. Normally there would be no arbitral tribunal existing at the time of the bond being called. In this case, the emergency arbitrator which most of the international arbitration rules such as ICC, LCIA and SIAC, etc. adopt can be utilized. Finally, the contractor can block the issuing bank from paying the bond proceeds by way of a provisional attachment in case where it also has rights to claim some unpaid interim payments or damages. This is the preservative measure under civil law system, which the lawyers from common law system are not familiar with. As explained in this article, it is very difficult to block the issuing bank from paying in response to the bond call by the beneficiary even if the call has no valid ground under the underlying construction contract. Therefore, it is necessary for the applicants who are normally engineering and construction companies to be prudent to make on-demand bonds issued. They need to take into account the creditability of the project owner as well as trustworthiness of the judiciary system of the country where the owner is domiciled.

• Journal of Service Research and Studies
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• v.6 no.4
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• pp.59-74
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• 2016

The purpose of this paper is to see what the problem is and what the direction of the Investment of ELB is after this study has analyzed an achievable possibility for a suggested yield of ELB. It analyzes estimated yields from January in 2010 to June in 2016 for ELB Structures issued during 2015~2016. It carries correlation analysis and regression analysis between ELB yield and minimum guarantee yield, maximum stock price growth limit, participation rate. As the study result, a probability of achievement over 2% yield was below 20% as stock price growth had been inside maximum limit. An estimated average yield of ELB was 1.49% and it was lowed than 1.72% of Bank Deposit in 2015. So a realized yield was not satisfied the expected yield. As the correlation coefficient between ELB yield and minimum guarantee yield was 0.843, the correlation coefficient between ELB yield and maximum limit yield was 0.279, the correlation of minimum guarantee yield was high. The suggestion is that the a realized yield of ELB is lower than Bank Deposit interest and that the probability of stock growth inside maximum limit is low.

• The Journal of Small Business Innovation
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• v.19 no.3
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• pp.1-16
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• 2016

Korean government had used public 'credit guarantee schemes' (CGS) as a counter-cyclical measure. However, it is still controversial about the effectiveness of policy financing on the SMEs. Criticism on policy financing involves the argument that supporting enterprises hampers competition and innovation of SMEs by increasing their dependence on the government and delays the exit of marginal firms. In this paper, we investigate how to effectively build up the rationale of running public CGSs. At the same time, we propose the ways to coexist of public credit guarantee and market-based private finance system for SMEs. First, CGS, as a counter-cyclical function, must coexist with the private financial system by compensating the market failure caused by pro-cyclical behavior of the private financial market. Second, CGS has the comparative advantages, compared to both the interest rate policy of the central bank and fiscal policy of the government. The credit guarantee is the symptomatic treatment that could revitalize the economy shortly by providing liquidity. Also, knowing that CGS is provided based on the leverage ratio defined by outstanding guarantee divided by capital fund, public 'credit guarantee' (CG) has an advantage that is free from the risk of government deficit. Third, the reason for existence of the CGS should be founded in supporting services for SMEs, available only in a public sector that is difficult to expect from private banks. In this regard, it is desirable to strengthen the publicness of credit guarantee over the support for start-ups, growing companies, the improvement of productivity, increase of exports, a long-term investment in facilities, the employment-creating businesses, and innovative enterprises.

• International Commerce and Information Review
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• v.13 no.4
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• pp.275-295
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• 2011

Any attempt which requires banks to consider non-documentary conditions would destroy autonomy principle and increase the risks of the bank in L/C transactions. Therefore, non-documentary conditions are disregarded in the letter of credit. This provision was first introduced in UCP500, but later, ICC Position Paper No.3 added that if L/C requires documents related to non-documentary conditions, it cannot be disregarded. While the language in UCP600 is basically the same as that in UCP500, there is a difference between the two in that the former disregards the documents related to non-documentary conditions even if they are required by L/C. However, it should be remembered that international standard banking practice does not disregard all of non-documentary conditions. It recognizes the validity of some non-documentary conditions which it is not feasible to change into documentary conditions. That is, such non-documentary conditions as can be determined from an index specified in the guarantee or identified from the issuing bank's own records or their normal operations are recognized as valid in legal cases. ISP98 and UR00758 do not consider these as non-documentary conditions. The applicant should be cautious not to include non-documentary conditions in their applications.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.15 no.4
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• pp.17-25
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• 2020

Venture debt is a prominent funding tool to promote scale-up of ventures. In the growth stage, venture firms that need large-scale funding can accelerate their growth by leveraging venture debt without diluting their shares, while venture capitals can quickly recollect their investments by accelerating the growth of the ventures they invest. By supplying venture debt, banks can diversify their asset primarily concentrated on loans, and improve the return on assets. As in the case of Silicon Valley Bank, a leading venture lender, closer cooperation between the two agents is essential to supply venture debt. One is the venture capital, an equity capital supplier, and the other is the bank, a debt capital supplier. To this end, we propose "credit risk sharing venture loans" and "venture loan pooling". The former encourages banks' participation in the venture debt market where the manager of Korean Fund of Funds, KVIC and policy guarantee schemes such as KODIT and KIBO screen or partially absorbe the risks inherent in venture loans. The latter reduces the burden of banking on individual venture loans through securitization.

• Transactions of the Korean Society of Mechanical Engineers A
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• v.41 no.10
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• pp.967-974
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• 2017

In this paper, a differential-braking-based yaw moment control system was developed to guarantee robust performance against road bank angle. A new target yaw rate model was established by combining the signal from a lateral acceleration sensor and 2-DOF single track model. In addition, a disturbance observer was utilized to take into account parameter uncertainties in yaw dynamics and to improve robust performance of the controller. CARSIM, which is a multi-DOF vehicle dynamic simulation tool, was used to verify the performance of the proposed controller in various driving scenarios. The simulation results indicate that the stability of the vehicle was robustly maintained by the controller, which is characterized by the reflection of the signal of a lateral acceleration sensor signal and by the compensation of the errors in the model parameters via the disturbance observer.

• International Commerce and Information Review
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• v.7 no.3
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• pp.247-268
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• 2005

In this study, I analysed the influence of the Korean Officially Supported Export Credit System upon Improvement upon Korean Export, investigated Korean Officially Supported Export Credit System focussing on the Short-term Export Loan System & Medium and Long-term Export Loan System in Korea Eximbank and sought for the measures overcoming problems therewith. In my research I started from a basic model analyzing Short-term Export Loan & Medium and Long-term Export Loan using added several variables that have effect on export such export relative price, world income and the amount of post-shipment credit bank guarantee. As a result, amount of Short-term Export Loan & Medium and Long-term Export Loan, world income and export relative price showed expected responses and Short-term Export Loan was significant. In case of amount of Short-term Export Loan System was statistical significance.

• Journal of KSNVE
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• v.9 no.6
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• pp.1116-1122
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• 1999

HRSG, which is one of main components of the combined cycle power plant,is composed of an inlet duct, a main body and casing, an outlet duct and a stack. It is important to design HRSG wihtin the allowable noise limit. For this purpose, it is necessary to analyze and predict the noise reduction and radiation at HRSG. In this paper, the technology for the noise prediction at each part of HRSG has been based on the empirical and field data, and also the HRSG noise prediction program has been developed. In order to verify the developed technology and program a field test is conducted. The results of noise prediction show good agreement with the measured.

• Environmental and Resource Economics Review
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• v.27 no.4
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• pp.639-666
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• 2018

This paper analyses the investment options of groundwater development project under water price uncertainty. The optimal investment threshold price which trigger the investment are calibrated base on monopolistic real options model. Stochastic dynamic model is set to reflect the uncertainty of water price which follows the GBM (Geometric Brownian Motion) process. Our finding from non-cooperative investment decision model is that uncertainty of water price could deter the groundwater investment by considering the existence of option values. For policy markers, it is easy to manage 'charges for utilization of groundwater' rather than 'performance guarantee ratio' when managing groundwater investment with pricing policy. And it is necessary to make comprehensive and well-designed policies considering the characteristics of regional groundwater reservoir and groundwater developers.