Difference Between Confirm And May Add In SWIFT MT700

[BmaBassam]

what is the difference between the confirm and may add at MT700 field 49, and about the related charges,

thanks in advance,

Bassam

[picant]

Hi Pal,

IMHO, difference is that in MAY ADD charges are on beneficiary account. The full sentence was May add at beneficiary request and costs.
Ciao

[Navi]

Hi,

In mu opinion,
CONFIRM -issuing bank requests nominated bank to add its confirmation to the credit.
MAY ADD - issuing bank authorizes the bank to add its confirmation. Nominated bank after contact with beneficiary may decide to confirm or not.

Regarding charges, although in MAY ADD case confirmation charges are expected to be covered by beneficiary, parties may decide contrary.

[gegeeee]

Hy,

For most cases it is related to charges, when issuing bank issues an LC with requirement: MAY ADD, it means that at the requets of beneficary, nom. bank can confirm original LC but charges will be on Beneficiary's account.
.
Please pay attention "for most cases". I agree with colleages parties may decide contrary.

[picant]

Hi Pals,

all is possible nowadays, but MAY ADD with issuing's bank bearing confirmation costs111
This is just my opinion.
Ciao

[abrar]

"May Add", although not expressly indicated, is generally accepted to mean "at beneficiary's request". Of course, this supposes that the LC also indicates that confirmation charges are to be paid by the beneficiary (if charges were to be paid by the applicant, this would be unusual). However, it as well for the confirming bank to clarify with the issuing bank as to who will be liable for the charges in the event that the LC is not utilised. In such a case the UCP makes clear that the charges revert to the issuing bank and unless there is an express condition in the LC to the effect that the confirming bank must receive its confirmation charge in advance before adding its confirmation (in my view an unfair requirement) this situation is a distinct possibility.

[dinesh2476]

Dear Abrar,

Below have listed questions regarding MAY ADD/CONFIRM LC, Hope this will helpful for the all people who just entered on trade products.

1.What could be the scenario when the LC issued with ''MAY ADD'' instructions and states charges are on applicant account.(Hope no beneficiary rejects ''confirmation'' when the charges are on applicant account).

2. Do we have any protection in UCP over ''MAY ADD'' LC. Article 10(A) talks about LC where the confirming bank confirmed the LC at the request of the issuing bank(assume issuing bank received confirmation that nominated bank confirmed the LC).

3. What could be the situation of the confirming bank(MAY ADD) if the LC is cancelled without knowledge of confirming bank(MAY ADD). should the bank has to take the risk of confirming the MAY ADD LC since there is no request from issuing bank to confirm the LC.

4. Is it the best practice, the issuing bank request (CONFIRM) the nominated to confirmed the LC, when charges are on beneficiary account. we often see cases where we have added confirmation to the LC based on IB instruction, Later beneficiary request to cancel the confirmation. who should pay the confirmation charges booked in the system for that particular period.(if beneficiary rejects to pay, shall we request IB to pay)

Regards
Dinesh

[dinesh2476]

Dear Abrar/Experts,

All opinions are welcome.

Regards,
Dinesh