Special Agreement Between Advising Bank And Issuing Bank

[shahriar]

dear all,

i have read in a number of texts which says that advising bank may a change certain reimbursement clause if they have agreement with the issuing bank. i would like to know is the beneficiary bound by such instruction. besides how the beneficiary will be sure that whether the advising bank have especial agreement with the issuing bank or not?

regd

shahriar

[picant]

Hi Pals,

reimboursing instructions are for the advising banks only and could not be communicate to beneficiary(see Standard documentary Credit forms -under UCP 500-broch. 516) Naturally an advising bank could ask the issuing bank to change those, specially if the advising bank run a current account with issuing bank . However it is a bad practice to send copy of SWIFT MT 700 to the beneficiary, without cancelling the reimbursement instructions, even if now freely available l/c are not limited to negotiation, but they are for payment, sight and deferred, and for acceptance too.

Other comments appreciated

Ciao

[iLC]

important information from picant. thanks! need to look in it. but i found no reason to conceal the reimbursement instruction. in fact many important decision depends on it. besides similar question has been answered by ICC earlier. if reimbursement instruction is be concealed, ICC would have made that clear in the opinion. anyway, i never like the scenario where the advising bank may change any content of the original LC. if the issuing bank had to offer advising bank a privilege, its better to write the clauses in ways suitable to the advising bank during the drafting of the LC.

[cristiand969]

I consider a bad practice doing so as the beneficiary may decide to present himself documents to the issuing bank.
If the reimbursement clause bears some restrictions initiated by advising bank (which was not named in the query as a nominated bank) the said advising bank may face real problems. Pls bear in mind that a credit can neither be amended nor cancelled without the agreement of the issuing bank, confirming bank (if any) and beneficiary. The only role of the advising bank is to advise acuratelly what they have received and nothing more.
regards
Cristian