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Discrepancy quoted on a draft - Contested by the presenting bank

Posted: Wed Apr 11, 2018 4:01 pm
by sajchi
Hey All,

Kindly seeking your opinion on a recent incident which i had to go through.

An Usance LC was opened restricting to SCB-China ( Confirmed LC ) requesting the draft to be drawn on the confirming bank. However we received the shipping documents through a different bank requesting us to honor their claim at maturity. upon scrutinizing we found out that the drawee on the draft differs from that of the credit. Accordingly we raised a discrepancy stating that the drawee on the draft nbot as per LC . How ever the presenting bank has contested stating that the discrepancy is null and void. Can i have your opinion on this please.



Posted: Thu Apr 12, 2018 1:33 am
by picant
Hi Pal,

Draf is not a document, except when required in the Field 46 of swift MT700.
In your case, IMHO, the draft may not be accepted because of KYC, AML Rules as
the drawee is not as per l/c terms and may hide prohibited transaction.
No definitive answer without full details.
Other comments appreciated



Posted: Thu Apr 12, 2018 1:54 am
by cristiand969
The draft should be drawn on issuing bank when the confirming bank is by passed