SBLC

With the introduction of Uniform Rules for Documentary Guarantee or URDG 758, the rules for Documentary Guarantee seem to be popular again. It can be imagined from the increasing number of questions that have popped up in recent days. Documentary Guarantee Forum is an effort to develop a platform to discuss these questions.
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jghn
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SBLC

Post by jghn »

Hi,

Need an opinion as to whether an SBLC(e.g Issued by Bank X in Country A) with the following clause can be considered consistent:

1.SBLC is advised through Bank Y in country B
2.Expiry is at "Any bank in country B by Payment"
3.Available with Issuing Bank i.e Bank X in Country A
4.Field 78 states that "you are authorised to negotiate and claim from us confirming docs.are in compliance"( documents here meaning documents required to be presented by the benf.while lodging claim under the SBLC).

Questions:
1.Is there a concept of negotiation under an SBLC?
2.If there is, how can it be applicable in the current case since it is avaialble by Payment

Related Question:
Even if there was no mention of Negotiation, SBLC being basically a Guarantee like instrument, can any entity other than the issuing bank, confirm compliance and claim on the issuing bank?(in this caseBank Y) Isn't the benf supposed to submit claim at the Issuing bank for payment?

Awaiting response

Regards...
leekaiyin55
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SBLC

Post by leekaiyin55 »

Dear Jgbn

Please advise under what governing rule(i.e. UCP600 or ISP98) is the said SBLC. The concept of negotiation is only good under UCP600 but not ISP98.

In fact, it is not common to have SBLC allowing for negotation as the nature as SBLC tends to be for secondary payment (e.g. breach of contract) i/o primary payment (e.g. shipment under normal LC)

Rgds
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