100% Advance Payment LC

[DarkKnight]

Dear All,

I am the beneficiary and have received a draft LC issued from a bank in Egypt with 100% Advance Payment against beneficiary's acceptance of LC terms and conditions. Is this acceptable?

100 PCT OF LC AMOUNT TO BE PAID TO BENF'S AS ADVANCE PAYMENT VALUE 7 WORKING DAYS FROM YOUR TERSTED MSSG.STATING
THAT BENF HAS RECIEVED AND ACCEPTED L/C TERMS AND CONDITIONS.

Need both beneficary and bankers perspective.

Your valuable comments will be appreciated.

[picant]

Hi Pal,

from beneficiary's point of view it is ok, after checking the l.c terms and condition ,the beneficiary gets the money and than will send the goods to applicant and present documents in availment of l.c.
Issuing bank may grant this facility under a deposit of money or as credit line without considering the goods control.
Beneficiry's bank will give money after getting funds from issuing bank.
Applicant has a full risk and frankly I know that Egypt has restrictions and hampers in import, but this may not the case.
A correct knowledge of the parties is advisable!!!
Red Claused l-c is used with a long and trustworth business relationship.
Other comments appreciated

[FanTrade]

It depends... What are the terms and conditions the beneficiary must adhere to so that he may get paid? Maybe some of the conditions talk about a presentation of documents?

[jinugu]

Hi from beneficiary perspective it's an advance payment.
Again, really need to see the LC to comment. Exchange control regulations and other local regulations could necessitate such a requirement. From my knowledge Egypt central Bank has announced some changes 6in the recent past. Jinugu