Issuing Bank Acts As Applicant While There Is Importer

[ofei]

Dear All,

A credit issued by a bank from south africa stipulated that the applicant is issuing bank while the notify party of the B/L is importer. The consignedd in the B/L is made out to issuing bank's order.
Have you ever met such credit? How will the beneficiary make the invoice?

[cristiand969]

Unless otherwise stipulated in the credit according to UCP 600 the invoice must be made out in the name of the applicant.
It is a bit unusual such a requirement but as long as you have the credit (i.e undertaking of the issuing bank) this would not trouble you so much unless your buyer require otherwise than stipulated in the credit. Check with him!
regards
Cristian

[iLC]

dear ofei,

unless having the full detail of the credit and the bank, its tough to comment. but i think it may be a concept of Islamic Banking where the bank purchases goods and resale it to the ultimate importer at a higher price and thus avoid interest. im not sure though. anyway, theoretically I see no problem as article 2 clearly says

Issuing bank means the bank that issues a credit at the request of an applicant or on its own behalf.

[jmitra]

dear ilc,

just for argument!!

may be you are right. but the definition of applicant does not include the issuing bank as per commentary of the UCP 600. besides, i think UCP also does not include since applicant is defined as "on whose request credit is issued". if issuing bank can become a applicant, then there would be no question of request. however SWIFT supports the concept of "on behalf".

regards
mitra