Payment Against Compliant Fake Document

[imuwhocares]

Bank to bank documents receive under LC. Issuing Bank found document compliance as per LC and effect payment accordingly, meantime applicant release documents and found goods are not as per LC. in further investigation found the whole documents was fake.

Q.1 Is there any Responsibility to issuing bank due to make payment against fake document?
Q.2 What Steps now applicant can take against the supplier?
Q.3 what precautionary steps issuing bank/applicant take in future to avoid this situation i.e. fake documents presentation?

as a trade expert expect your suggestion

[gegeeee]

Q.1) Please refer UCP600 article 34.
Q.2) It should be resolved outside of Original LC (Must be resolved through the courts)
Q.3) Bank should force its client before starting negotiating with exporters to find out all possible details regarding them. (Rating of the company, If the company is well known. Also applicant should find out who will be the carrier of the goods. For example B/L issued by MSC and Maersk are a little bit hard to forge. Finally the best option is to make delivery acceptance act at sellers premises at the loading port and include it in original LC)

Hope it helps.

[gondem]

Banks have no responsibility to ascertain the authenticity of the documents. They only decide on the facial apparent of the documents.

[varadareddy83]

Please refer UCP 600 ART. 5 & 34 . Issuing bank is not liable for payment.
To avoid this type of situations applicant should ask the documents i.e. inspection/ quality certificate from reputed institutes.