Who Pays Confirmation Charges When Field 49 Reads Confirm?

[Sudheer]

Hi All,

we have received the LC from ABC bank where as field 49 reads confirm and field 71B reads as all charges are for applicant account except advising charges.

we have added our confirmation and sent swift to ABC bank to pay our confirmation charges USD XXX.00.

after 2 weeks we have received amendment received with increase the amount. where as charges reads as all charges outside issuing bank are for beneficiary account.

we have sent telex to issuing bank regarding confirmation charges are for whose account (because as per LC is for applicant and as per amendment reads as beneficiary) after beneficiary is not accepting the charges on amendment.

my question is how issuing bank is issued a amendment without concern the applicant on charges.

note: 1. LC expires on 30MAR17.
2. Beneficiary is chasing for confirmation.

please advise how we can handle this case.

thank you.

[picant]

Hi Pal,

If you added confirmation to l/c, probably you are confident in issuing bank, you requested your confirmation fees to issuing bank and charged the beneficiary for your advising commissions.
The issuing bank never paid you.
Then you received amendment increasing the amount of l/c, so you may charge extra confirmation
fee to the party indicated in the amendment, beneficiary, that refuse to pay these fees.
Probably, the amendment has been requested by beneficiary and applicant agreed only if charges were borne by beneficiary.
However, you may claim all charges and costs from the issuing bank as per originary l/c wording and per art 37 UCP 600.
Other comments appreciated
Ciao

[shafi865]

Hi !
Totally agreed with Picant. But I want to add one more thing that an amendment can not be accepted partially. So if the beneficiary disagrees with the charge, then the amount can not be increased. As a result if the beneficiary presents the documents with increased value, then the confirming bank should deduct its charge from beneficiary while it honours or negotiates. But confirming bank unable to collect the charges, then according to UCP sub-article 37 (c) Issuing Bank remains liable for payment of charges.

Regards,
Shafique