Compliance and l/c transferable

[picant]

Hi Pals,

Is somebody aware about Compliance problems in issuing a transferabl l/c, due to the fact that the final beneficiary remains unknown?

thanks

Ciao

[jmitra]

dear picant
would really appreciate if you please give us more detail. are you trying to say that the issuing bank refuses because it has no idea about the final beneficiary?

[picant]

Hi Pals,

It seems that Compliance dept in a bank informs foreign dept that a transferable documentary credit could cause problems in KYC or AML . Banks when effect international transfers or payment must follow strictly procedure in identifying sender and receiver of funds. By transferring a l/c the issuing bank is not aware of the true beneficiary of the proceeds. I, personally, think that a bank must know the advising bank, than the advising bank its customer etc. but may be rules are rules and must follow them.
However thanks for your help.

Ciao

[cristiand969]

I know that such further details cannot be unveiled even jmitra inquired about.
To protect somehow with compliance in transferable credits you should insert a compliance clause in your LC and perhaps better to put also to additional conditions something like: when claiming reimbursement the negotiating bank should inform vessel name, carrier ,... any third party involved In this way you would know the details you want before payment is triggered
This should keep you harmless in respect of KYC and AML.