Partial Confirmation (Revolving Vs Onetime Confirmation)

[Gart]

Dear colleagues,

We have got a case where the beneficiary is asking us, as a nominated bank, to add partial confirmation to L/C (I know, i's not standard...):
L/C is available with ourselves by payment, confirmation instructions: may add, L/C amount: USD 100 (for easier understanding, of course), partial shipments: allowed, goods: smth. 100 pcs. at 1 USD/pc., beneficiary asks us to confirm L/C for USD 20 only.
And we have doubts regarding the following issue: in case we add our partial confirmation to L/C, the beneficiary presents the documents under L/C for the amount of USD 20, they are paid by us by debitting issuing bank's account held with ourselves, should the confirmation still be valid for next USD 20 portion (and so on) or it ceases to be valid as the USD 20 under L/C have already been paid?
Your valued opinion would be highly appreciated considering this case.

[picant]

Hi Pal,

confirmation means that a bank in your Country, your bank included, will take the risk towards you instead of issuing bank.
Frankly I dont understand partial confirmation, if the issuing bank worths less than l/c amount I will refuse or ask for cash collateral or similar deposit.
Your comments appreciated
Ciao

[Gart]

I'm sorry, maybe my request was not totally clear: beneficiary just wants us to add confirmation not to full L/C amount, but to some amount of its value, eg. L/C amount is USD 100 000, beneficiary wants us to confirm just USD 20 000 amount of L/C.

[balaji68]

As per UCP600 rules there is no provision for partial confirmation of the credit. Nominated bank to add confirmation at the request of issuing bank, but not at the request of beneficiary. However, nominated bank may add confirmation at beneficiary's request outside of UCP (silent confirmation). Nominated bank may seek all clarifications required from the beneficiary to understand intentions of parties & assess risks involved before agreeing for such arrangement- balaji.kas@gmail.com

[KRISH]

Hello all,

Yes its possible.

Even when partial shipment is not allowed.

This idea is especially effective when there is more than one confirming bank.

However in your case as you are acting as a confirming bank you should should clearly mention on the advice regarding the credit amount for which it is adding its confirmation. Ideally this request should come from the Issuing bank, bene cannot instruct even if he does seek clarification from I/B.

Please correct if wrong.

Regards,
Krish