How Can The Importer Collect The Document And Arrange The Payment Setting

[honeyryu]

Issuing bank ('i/b' = reimbursement bank) opened Sight LC to advising bank ('a/b') and amended confirmation status to 'MAY ADD' and payment instruction as 'UPON RECEIPT OF DOCUMENTS IN COMPLIANCE WITH L/C TERMS, I/B AUTHORIZE REIMB BANK TO CLAIM AT SIGHT'. and available with Bank XXX by negotiation.

and then, next day 'a/b' requested another amendment as this:-
- Confirmation status: Confirm/May add
- Payment instruction: Upon receipt of documents in order at confirming bank's counter, we authorize you to claim reimbursement from reimbursing bank at sight.


In this case, how can the importer collect the document and arrange the payment setting?
Does this mean that confirming bank pay to nego bank first and on the same day, they claim by MT742 to i/b at sight basis? once payment is done, will confirming bank deliver the documents to i/b? What charges will be incurred in this payment structure? I find this is totally unnecessary procedures involved.

[picant]

Hi Pal,

Someone stated that a confirming bank is an agent of the issuing bank. Buyer and seller decided for a documentay credit at sight, vailable at the confirming bank IMHO, with confirm, confirmation charges will be on applicant's account, with may add to the beneficiary.
The beneficiary by presentation on compliant documents to the confirming bank should received the proceeds. The confirming bank will claim reimbursement from reimbursing bank, costs will vary but near
100/150 USD.Issuing bank may decided in reimbursement authorization who will support this fee.
Documentary credit is a mean of payment, it depends on the wording if this payment will be made
closer to buyer and seller. Remember that seller may require a payment before shipping or sometime before starting to produce, the buyer could ask for a deferred payment etc. It will play a big role the power of the party.
Other comments appreciated
Ciao