Is it allowable to use LC clause 57 (Advice through) from one country to another country?

mostafashakil · Post by **mostafashakil** » Tue Jun 02, 2020 8:42 pm

Dear Expert,
Greetings!
I am new member of this Forum. I am working in international trade for few years. I want to share a case and seeking for suggestions/advice/guidelines.

CASE:
There are three (3) parties in this transactions.
Party-1: Buyer: A Company Ltd. from Bangladesh.
Party-2: Seller: B Company Ltd. from Switzerland.
Party-3: Shipper: C Company Ltd. from India. [Agent of Second Party (B)]

Party-1, issue a LC to Party-2 (as beneficiary) @ Switzerland and shipment will be delivered from Party-3 [Agent of Second Party (B)]. Third party Bill of Loading is acceptable. This transaction could happen using transferable LC. For Transferable LC 'A' will send LC to 'B' (as 1st Beneficiary) and B will transfer it to 'C' (as 2nd Beneficiary). I know the document presentation flow of a transferable LC, and it's time consuming. But I am thinking about alternative way, but not sure it is possible or not.

Question-1: Is there any option That shipper/party-B's bank can directly forward the shipping document to buyer/party A's bank? Here buyer want to save the time, don't want to wait for document move from India-Switzerland-Bangladesh. Is there any way?

Question-2: Is there any option other than transferable LC?

Question-3: Is it allowable to use LC clause 57 (Advice through) from one country to another country?

Thanks in Advance.

dinesh2476 · Post by **dinesh2476** » Sat Jun 20, 2020 10:13 pm

Hi

It is possible if the 1st and 2nd beneficiaries are in business relationships for long and know the transaction details. 1st beneficiary may ask second beneficiary to send documents directly to the issuing bank.

1st and 2nd beneficiary to deal separately for the amount to be paid 1st beneficiary as profit margin.

Thanks & Regard
Dinesh Kumar

mostafashakil · Post by **mostafashakil** » Mon Jun 22, 2020 9:50 pm

Hi Dinesh,
Thanks for your feedback. Is there any reference from UCP600 or USBP or any other ICC publications? If so please let me know.

TIA

dinesh2476 · Post by **dinesh2476** » Sat Jul 11, 2020 8:55 pm

Hi,

Though we have a provision in the UCP that allows the situation to present the documents directly to issuing bank in the event of no acknowledgement of 1st beneficiary. I justed cited the situation where with the agreement of 1st and 2nd beneficiary and their bankers, the situation you described is possible.

Since the payment of 1st and 2nd beneficiary payment mostly recognised only upon receipt of the proceeds from the issuing bank, we may not see any issue if both parties agree with the said understanding and willing to send the documents directly to issuing bank with a specific note of their undertaking in the cover letter to issuing bank.

Thanks & Regards
Dinesh Kumar

Is it allowable to use LC clause 57 (Advice through) from one country to another country?

Is it allowable to use LC clause 57 (Advice through) from one country to another country?

Re: Is it allowable to use LC clause 57 (Advice through) from one country to another country?

Re: Is it allowable to use LC clause 57 (Advice through) from one country to another country?

Re: Is it allowable to use LC clause 57 (Advice through) from one country to another country?