Who Pays The Negotiation Commisions Under UCP600

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hassan
Posts: 90
Joined: Tue May 20, 2008 5:19 pm

Who Pays The Negotiation Commisions Under UCP600

Post by hassan » Mon Jun 09, 2008 5:52 pm

Hi all,
L/C is available "by negotiation" at sight with bank N. this bank decides to negotiate docs.
Q1 : can the bank N ask for negotiation/payment commission like
"by payment" terms?
Q2: if yes who have to pay that commission?

Mehdi
Posts: 48
Joined: Sat Jun 07, 2008 6:42 pm

Re: commisions

Post by Mehdi » Mon Jun 09, 2008 7:47 pm

No questions should rise in the name of commission. Banks through negotiation trade in foreign exchange/currency. The margin contains in application of exchange rate having significant spread to be received when sold to customers for outward payment. However, bank may impose service charges as per their internal policy.

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shahriar
Posts: 923
Joined: Fri May 16, 2008 1:03 am
First Name: Shahriar
Last Name: Masum
Organization: Mutual Trust Bank
Filter: Two Plus Two =: 4
Location: Bangladesh

Re: commisions

Post by shahriar » Mon Jun 09, 2008 8:57 pm

i agree with mehdi. however once mr. vincent told me that you may go with any charges as long as you can manage others ;)

regds

shahriar

hassan
Posts: 90
Joined: Tue May 20, 2008 5:19 pm

Re: commisions

Post by hassan » Tue Jun 10, 2008 12:00 pm

I think
a) negotiation commission is different from what you referred to. because The margin of exchange rate and having significant spread to be received when sold to customers for outward payment is not for negotiation in l/c only but a bank will get it even in money maket.commission is usually received for two reasons : 1- due to checking the docs and spending time,proficiency, specialty of the bank for it and 2- bearing of risk by negotiatin/nominating bank
b)
you suppose L/C currency is EUR and benef. is in Germany so the nominated bank for payment dose not need to exchange. what about in this case?

Mehdi
Posts: 48
Joined: Sat Jun 07, 2008 6:42 pm

Re: commisions

Post by Mehdi » Tue Jun 10, 2008 6:52 pm

Nothing but service charge (or whatever name it is referred to) appears to be applicable in respect of situation 'b'.

Recent trend shows upward in trading through CAD basis in lieu of dc in EU countries.

Regards.........Mehdi

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