Best Trade Solution

Guys,

If i have Red clasue LC, where advance pmt in within the original LC.

Should i structure LC available by mixed payment?

It is mandatory or can i just structure LC available by def pmt and in additional conditions say that advance is paid within the original lc at sight after presentation of xxxxxxxxxxxxxxxxx document.

Hi Pal,

IMHO, it depends on the Red Clause facility. However a simple advance does not make the l/c available by mixed payment.
On receipt of prescribed documents you will advance the agreed sum, then on presentation of full documents for full amount you will avail, the l/c reimbursing the advance.
Other comments appreciated
Ciao

Dear Picant,

what do you mean in word "simple advance" , in my case advance is within lc. beneficiary has to present certificate of beneficiay and after this i (Bank) pay advance being 20% of Total lc amount. 80% i pay after 90 from b/l date against complying presentation.

Hi Pal,l/c remain valid for full amount in the sec

i told you that all depends on the Red Clause wording in l/c. If the advance is made against a receipt and an undertaking to ship the goods within the l/c terms, issued by the beneficiary or an invoice for said amount etc.
In the first case is an advance, in the second is an advanced payment., The first case is a red claused l/c , the second is a mixed payment. In the first case the l/ amount will remain in full, in the second one only for the balance.
I dont know with which funds you will effec the advance, I think with issuing bank's fund.
Let me know, it is not easy to argue with you, without having documents on hands.
Other comments appreciated
Ciao

Dear Picant,

Thanks for your protmpt reply and attention.

Funds are made by issuing bank. I guess it will be mixed pmt.

Thanks ina advance.

Picant,

Actually i cant differ red clause Lc and Lc where advance is made within it. I thought if advance is made within LC with issuing banks funds it is a Red clause.

If you give me a little examples i ll be so much appreciated.

Thanks in advance

Best option would be to indicate that LC is available by deferred payment and mention the advance separately.

So :

Field 41A : Available with XXXXX Bank BY DEF PAYMENT

Field 42P : Deferred payment details ( 90 days b/l date)

Field 47A : 20% of LC value payable against beneficiary's "simple receipt" and 80% ppayable against documents detailed under filed 46A.

Thank you Abrar.