Presenting Docs to the Issuing bank
-
Chak
- Posts: 83
- Joined: Tue Apr 05, 2011 7:08 pm
- First Name: Chakradhar
- Last Name: GL
- Organization: State Bank of India
- Filter: Two Plus Two =: 4
Presenting Docs to the Issuing bank
Under UCP 600, can a beneficiary, through a presenting bank, have the right to present documents against a confirmed letter of credit directly to the issuing bank? What are the risks associated?
-
abrar
- Posts: 984
- Joined: Mon Oct 25, 2010 11:52 am
- First Name: Abrar
- Last Name: Ahmed
- Organization: Crown Agents
- Filter: Two Plus Two =: 4
presenting dcuments directly
No real risks except the risks if any, for which the confirmation might have been originally sought (i,e sovereign risk, issuing bank's credit worthiness, political risks, etc).
The beneficiary of course, has the option to bypass the confirming bank, but the question is, if the documents comply, why would he wish to lose the benefit of the confirmation?
The beneficiary of course, has the option to bypass the confirming bank, but the question is, if the documents comply, why would he wish to lose the benefit of the confirmation?
-
Chak
- Posts: 83
- Joined: Tue Apr 05, 2011 7:08 pm
- First Name: Chakradhar
- Last Name: GL
- Organization: State Bank of India
- Filter: Two Plus Two =: 4
Presenting Docs to the Issuing bank
Yeah true. Thanks Abrar.
-
dinesh2476
- Posts: 727
- Joined: Sat Oct 15, 2011 12:27 pm
- First Name: Dinesh Kumar
- Last Name: ...
- Organization: Chrome
- Filter: Two Plus Two =: 4
- Location: PU
Presenting Docs to the Issuing bank
Dear Experts,
I have the scenario described below and thought of to share it with experts to see their view
An LC received by beneficiary contained confirming bank understanding to pay and charges to be paid for that. Since the confirming bank charges were huge and presentation had discrepancies, the beneficiary wanted to skip confirming bank charges and presented the documents directly to issuing bank through his bank.
As confirming bank charges were beneficiary, issuing bank taken a caution supporting applicant while making payment and made payments through confirming bank which deducted their confirming bank charges and effected net proceeds to presenting bank
The beneficiary is now claiming to return the confirming bank charges as they sent the documents to issuing bank bypassing confirming bank with purpose and citing UCP article allowing to make a presentation directly to issuing bank if the beneficiary wishes to do so.
Though we have ICC opinion covering beneficiary from paying nomiinating bank charges(documents were not examined and no nomination was agreed by the nominated bank), the case in which beneficiary sent documents directly to issuing bank. Please share if the same principle apply here where confirming bank had not examined the documents and they shared only their confirming undertaking to pay)
Thanks & Regards
Dinesh Kumar
I have the scenario described below and thought of to share it with experts to see their view
An LC received by beneficiary contained confirming bank understanding to pay and charges to be paid for that. Since the confirming bank charges were huge and presentation had discrepancies, the beneficiary wanted to skip confirming bank charges and presented the documents directly to issuing bank through his bank.
As confirming bank charges were beneficiary, issuing bank taken a caution supporting applicant while making payment and made payments through confirming bank which deducted their confirming bank charges and effected net proceeds to presenting bank
The beneficiary is now claiming to return the confirming bank charges as they sent the documents to issuing bank bypassing confirming bank with purpose and citing UCP article allowing to make a presentation directly to issuing bank if the beneficiary wishes to do so.
Though we have ICC opinion covering beneficiary from paying nomiinating bank charges(documents were not examined and no nomination was agreed by the nominated bank), the case in which beneficiary sent documents directly to issuing bank. Please share if the same principle apply here where confirming bank had not examined the documents and they shared only their confirming undertaking to pay)
Thanks & Regards
Dinesh Kumar
-
picant
- Posts: 2026
- Joined: Wed Aug 20, 2008 1:49 pm
Re: Presenting Docs to the Issuing bank
Hi Pals,
nowadays the most of charges and commissions are locally regulated.
in this case the issuing bank is liable for commissions and fees of confirming bank having request the latter to confirm. So if the l/c will be utilized the beneficiary will support this fee, in some way.
Confirming bank, having booked the credit facility for the issuing bank, will charge this commission for the period of confirmation. Being presentation made to issuing bank, the l/c will expiry "unutilized" for confirming bank and not producing more cost.
At the end of the story, confirming bank has the right to cash its confirmation fees but no other compensation.
Other comments appreciated
Ciao
nowadays the most of charges and commissions are locally regulated.
in this case the issuing bank is liable for commissions and fees of confirming bank having request the latter to confirm. So if the l/c will be utilized the beneficiary will support this fee, in some way.
Confirming bank, having booked the credit facility for the issuing bank, will charge this commission for the period of confirmation. Being presentation made to issuing bank, the l/c will expiry "unutilized" for confirming bank and not producing more cost.
At the end of the story, confirming bank has the right to cash its confirmation fees but no other compensation.
Other comments appreciated
Ciao