1. Back to back LCs are recognised under UCP 500. The only problem with B2BLCs is that co-ordinating two LCs to cover both the purchase and resale of the same goods is complicated. Also, the issuer of the Slave LC will likely insist that it be a Confirming Bank under the First, so that it will have the right to receive, and to accept or reject amendments in its discretion.
2. Transferable LCs are a much better deal and are ideally suited for middlemen who would like to protect their cost-prices.