Draft To Be Endorsed If Necessary

[normamajdalani]

Dear ALL,
Appreciate your opinion and comments on the following case:
.
We received an LC available with the issuing bank by acceptance of term draft to be drawn on them.
On beneficiary's request, we forward first presentation of documents to the issuing bank under the protection of articles 14 & 16 of UCP600, including beneficiary's draft drawn on the issuing bank to our bank order.
An advice of refusal received "DRAFT NOT ENDORSED BY OUR BANK"
We contested that it's not necessary to endorse the draft in this case.
As "payee" we beleive that by endorsing the draft we will transfer our rights on payment to the drawee i.e. the issuing bank.
we consider that endorsement's act is not to occur in this situation.
Furthermore we informed the issuing bank that such discrepancy is not grounds for refusal.
.
Pls your comments.

[mano]

dear

This topic is so critical and many debates every day on the draft with no single approved answer even the ruling organization Icc can't put an end to this matter but respect your case as draft has no clear reference of how to examine on ucp 600
It is a banking issue especially when the draft drawn on issuing bank, the issuing bank obligation is always exist with or without draft we don't know the reason of asking a draft on the issuing bank that adds nothing to its obligation as the beneficiary can discount the undertaking of the issuing bank as in practice the acceptance of maturity will be through authenticated message to the beneficiary or its representative bank the draft will not be accepted and returned back to beneficiary
Nevertheless new isbp 745 shows the extent of examining a credit bank draft and only refer to endorsement on b15 the draft is to be endorsed if necessary of course there is no reason to endorse the draft to the order of the issuing bank what should the issuing bank do with this endorsement it is the drawee the issuing bank can not use it as a collecting debt instrument because it is itself liable to pay the draft on its due date. I can accept the logic of endorsing the draft to the nominated/confirming bank especially if they will discount or negotiate the draft that is a necessary endorsement and if the nominated bank will act as a beneficiary's agent to collect funds such endorsement is acceptable

From you scenario and if the issuing bank not asked for such form of endorsement in the credit the discrepancy not valid and I'm in your position and I would ask the issuing bank what is the necessary to endorse the draft to your order
Please feedback
Regards

[picant]

HI Pal,

moreover a draft is not listed in field 46, so in case of l/c transmitted by Swift , but in many cases via different ways too,
so it is not a document.
In case of mistakes in amounts, maturities etc the issuing bank must inform the remitting bank and correct that.
Other comments appreciated
Ciao

[hardy2175]

I dont believe it is a discrepancy , even if the issuing bank believes that the remitting banks endorsement should be there if should asked for modification and not penalize the beneficiary for the bankers mistake.