insurance issued in local currencies

[berry]

dear friends,

i would take the opportunity to make some educational queries today. CDCS is knocking at the door!!

If the LC says that insurance document issued in local currency is acceptable, what would be the local currency here? Currency of beneficiary’s country or that of any currency?

[shahriar]

in my opinion, here local currency would mean beneficiary's country. certainly a beneficiary is not a local of other countries :lol:

[cristiand969]

I guess wording 'local currencies' may equally apply in this context to the issuing bank/applicant country. This is for two reasons:
1. The issuer of the message refers to 'local' which can be construed as 'at his end' (local = my place)
2. It is quite problematic for the buyer to make use of funds under an insurance claim in other currency than that of his country as this will involve both time consuming and loss in amount due to exchange rate between beneficiary currency and his 'local' currency.
I would not translate the same as the wording 'local chamber of commerce' as there are different views between these two issues. Remember that even ISBP also determines "exporting country" where everybody is tempted to consider than beneficiary country, as the place where the goods is received by the carrier. In a multimodal transport documents the situation may have unexpected results as seller may deliver the goods either in a place of receipt or at the port of loading which may be located in different countries.
Given the fact that shahriar answer is totaly different than mine which I agree that could be more correct than mine, this will give me the tought that a clarification from issuing bank must be sought.
Regards
Cristian

[iLC]

i think it depends largely on the structure of the sentence and the context. however in case of a general declaration like "insurance issued in local currency is acceptable"; i agree with cristian. it could also mean the issuing bank's. to avoid possible complication, i prefer to shout for clarification

[Viswanath]

in my opinion, LC is not clear, when it says local currency. There is no meaning when you say local. UCP article 28 says that Insurance must be made in the currency of the credit, words such as local has no meaning :?:

[picant]

Hi Pals,

ICC URC 522, art. 17 states: Payment in local currency
-In case of documents payable in the currency of the country of payment(local currency), the presenting bank must, unless otherwise instructed in the collection instruction, release the documents to the drawee against payment in local currency only if such currency is immediately available for disposal in the manner specified in the collection instruction.

Other comments appreciated

Ciao

[okeyxtra]

We should not forget the importance of Incoterm here. Unless where the credit mentions incoterm CIF, the local should refer to the applicant.