Dear Expert
In case credit indicate in field 41d:available with any bank by negotiation without stipulated
draft required and silent to show reimbursement at sight.
If complying presentation ,could beneficiary received payment at sight?
I will looking forward for reply!
Regards
Does Available By Negotiation Means Sight Payment?
-
narisa
- Posts: 63
- Joined: Tue Feb 03, 2009 9:23 pm
-
picant
- Posts: 2026
- Joined: Wed Aug 20, 2008 1:49 pm
Art 2 UCP
Hi Pal,
Art 2 UCP 600 clarifies that negotiation is possible with draft or documents.
Negotiation means that the negotiating bank, in your case any bank, may advance its own money to beneficiary, then claims
said amount from issuing bank.
So banks may advance the l/c proceeds to beneficiary, under deduction of customary fees, and obtain reimbursement from
issuing banks. The negotiating bank must have a specific credit line as the credit risks are towards beneficiary and/or issuing bank, as by negotiating a bankers draft.
Naturally, local laws may extend or reduce this possibility.
Other comments appreciated
Ciao
Art 2 UCP 600 clarifies that negotiation is possible with draft or documents.
Negotiation means that the negotiating bank, in your case any bank, may advance its own money to beneficiary, then claims
said amount from issuing bank.
So banks may advance the l/c proceeds to beneficiary, under deduction of customary fees, and obtain reimbursement from
issuing banks. The negotiating bank must have a specific credit line as the credit risks are towards beneficiary and/or issuing bank, as by negotiating a bankers draft.
Naturally, local laws may extend or reduce this possibility.
Other comments appreciated
Ciao
-
mano
- Posts: 33
- Joined: Mon Mar 11, 2013 12:07 am
- First Name: ahmed
- Last Name: rabea
- Organization: societe generale
- Filter: Two Plus Two =: 4
- Location: Egypt
Negotiation
Dear,
Noegotiation is not term of payment but it is way of life/framework that include All payment terms such as sight documents with or without draft ,term/defer payment with or without draft.
In you case please check the credit well especially field 47a and 78 if it is swift credit,if you don't find any inducation to payment tenor.this is a wrongly drafted credit and you need to contact issuing bank to check with it before any presentation and bad consequences this what called good banking practice.
Please check icc position paper no.2 that try to clarify the use of negotiation and icc ta 569
Regards
Noegotiation is not term of payment but it is way of life/framework that include All payment terms such as sight documents with or without draft ,term/defer payment with or without draft.
In you case please check the credit well especially field 47a and 78 if it is swift credit,if you don't find any inducation to payment tenor.this is a wrongly drafted credit and you need to contact issuing bank to check with it before any presentation and bad consequences this what called good banking practice.
Please check icc position paper no.2 that try to clarify the use of negotiation and icc ta 569
Regards
-
mano
- Posts: 33
- Joined: Mon Mar 11, 2013 12:07 am
- First Name: ahmed
- Last Name: rabea
- Organization: societe generale
- Filter: Two Plus Two =: 4
- Location: Egypt
negotiation
want to add,
after long discussion with others in work, we can conclude that in the absence of any ibstructions as to the terms of payment it would be considered to be available at sight.
regards
after long discussion with others in work, we can conclude that in the absence of any ibstructions as to the terms of payment it would be considered to be available at sight.
regards
-
RAHULCH
- Posts: 18
- Joined: Sat Jan 17, 2015 7:56 am
- First Name: RAHUL
- Last Name: CHANDRAN
- Organization: BANK
- Filter: Two Plus Two =: 4
- Location: INDIA
AVAILABILITY
Hi
To be very specific to your query let me say that... if any particular tenor/period is not mentioned in an LC ..it is available by sight..and since its available by negotiation and "if the underatakes to negotiate it will be paid at sight".
To be very specific to your query let me say that... if any particular tenor/period is not mentioned in an LC ..it is available by sight..and since its available by negotiation and "if the underatakes to negotiate it will be paid at sight".
-
GUBAZ
- Posts: 29
- Joined: Wed Jan 28, 2015 11:45 am
- First Name: ILYAS
- Last Name: K.
- Organization: BANK
- Filter: Two Plus Two =: 4
- Location: TURKEY
Negotiation
Hello,
Negotiation is outlined under UCP 600 Article 2 as follows:
"Negotiation" means the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.
The following explanation will enlighten the subject at hand.
The only documentary credit type that will definitely require presentation of a draft is that under which a documentary credit is available by acceptance. Drafts may or may not be required if a documentary credit is available by sight payment or by negotiation, and will definitely not be required if a documentary credit is available by deferred payment
Negotiation is outlined under UCP 600 Article 2 as follows:
"Negotiation" means the purchase by the nominated bank of drafts (drawn on a bank other than the nominated bank) and/or documents under a complying presentation, by advancing or agreeing to advance funds to the beneficiary on or before the banking day on which reimbursement is due to the nominated bank.
The following explanation will enlighten the subject at hand.
The only documentary credit type that will definitely require presentation of a draft is that under which a documentary credit is available by acceptance. Drafts may or may not be required if a documentary credit is available by sight payment or by negotiation, and will definitely not be required if a documentary credit is available by deferred payment