Can Transferring Bank Indicate A New Nominated Bank?

[mkp]

Hi all

According to Article no. 38 - g of UCP 600 :
" The transferred credit must accurately reflect the terms and conditions of the credit, including confirmation, if any, with the exception of:
- the amount of the credit,
- any unit price stated therein,
- the expiry date,
- the period for presentation, or
- the latest shipment date or given period for shipment,
any or all of which may be reduced or curtailed.
The percentage for which insurance cover must be effected may be increased to provide the amount of cover stipulated in the credit or these articles . "
What about NOMINATED BANK ? Can we , as transferring bank , to indicate a new NOMINATED BANK in a transferred L/C ? For example a bank in the second beneficiary's country ?

Regards

[cristiand969]

yes! pls read art. 38j

[iLC]

i agree with cristian. Commentary on UCP600 gives a clearer view saying that a beneficiary usually prefers a credit available with a local bank rather a foreign bank. for this reason, 38j allows transferring bank to make the credit available with a nominated bank which is at the locality of the second beneficiary. the second beneficiary can make an effective presentation even if the documents are presented to the nominated bank even on the expiry date of the credit.

by the way, i have a question. say the second beneficiary is located in India while the first beneficiary wants to make the credit available with HSBC Dubai, can the transferring bank allow this? i think no. because that does not go with the basic principle of this sub article.

[nesarul]

Dear,
I see no problem on crossboarder transfer with a changing the place of availability from transferring bank to somewhere of the world.
regards
nesar

[dinesh2476]

Dear Experts,

nominate a bank in the second beneficiary country.

In this forum as well as earlier forum states allowed it till original expiry date. any specific reason why do we need to allow the presentation till original expiry date as per MT700 at nominated bank in second beneficiary country

the second beneficiary can make an effective presentation even if the documents are presented to the nominated bank even on the expiry date of the credit.

Comments from Abrar

The issue of being allowed up to the original expiry date for presentation is somewhat concerning, but if one considers sub-art. 38 (i),the implication is that once the LC has been transferred, the presentation period under the original LC in respect of the transferor/1st beneficiary no longer applies. This is because the transferring bank on receipt of transferee's documents may request the transferor's invoice "on first demand" but if not received within a reasonable time, may forward the transferee's documents for payment.

[niketsurve]

Thanks for the updates.

[dinesh2476]

Dear Experts,

Please any opinion welcome.

usually, while transferring letter of credit to 2nd beneficiary we change(reduce) the LC expiry as per 1st beneficiary request that gives a plenty time for the 1st beneficiary to present a documents/corrected documents

However, official commentary states LC available with at 2nd beneficiary country along with emphasis on ''original expiry date''.