LC advised but beneficiary bank outside LC

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JCA
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First Name: Johan
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LC advised but beneficiary bank outside LC

Post by JCA »

Hello, question we have an issued LC from African country bank that is sent to London bank as receiving bank.

The above is unfortunately the only possible flow as our European banks (all A rated by internal policy) all deny being involved in any role in LC’s from this country.

The London bank is saying they can handle the LC but we have no relationship with them and they state that after LC they can perform a wire transfer to the bank of our choice.

I would expect that our bank might have compliance questions upon receipt of that credit but do you foresee any other risks in such a setup?

Note; we use the LC purely as a tool to have cash transferred to our beneficiary, we do not see it is as a credit risk mitigation tool.
The importer is a government owned organization and we work with a well established distributor in that country.

Thanks
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picant
Posts: 1962
Joined: Wed Aug 20, 2008 1:49 pm

Re: LC advised but beneficiary bank outside LC

Post by picant »

Hi Pal,

your banks have all the means to check the parties involved in this transaction. The concept of Bank varies in some Countries, we received request of SWift RMA from entities that are no banks(from my Country point of view).
Other comment appreciated
Ciao
JCA
Posts: 2
Joined: Sat Nov 20, 2021 1:19 am
First Name: Johan
Last Name: C Apple
Organization: Only
Filter: Two Plus Two =: 4
Location: Amsterdam

Re: LC advised but beneficiary bank outside LC

Post by JCA »

tx Picant
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