Urgently required

[ghubshawi]

Dear All,

I have received an advance payment bank guarantee from one of my supplier, however, it is a condition for that APBG to come into force that the corresponding value must be received by supplier.

In order to protect myself I put a condition in the L/C that the dawon payment is payable against presentation of an invoice and a confirmation notice from xxx bank (the guantor) stating that the APBG no.xxxx is into force.

I received a message from the issuing bank that the dawon payment was effected by the confirming bank against presentaion of an invoice and a copy from the same bank guarantee that is in my hand.

Please, help did the confirming bank act according to the LC terms?

Regards,

Ghubshawi

[shahriar]

Dear ghubshawi,

Precisely the confirming bank didnt act as per LC term given its clearly written in the LC that advance payment will be made against a confirmation from the BG issuing bank.

in my opinion, it was not a good idea to bring the advance payment into the letter of credit. i would rather prefer to remit the advance payment through the guarantee issuing bank; especially if the guarantee is subject to ISP98. the guarantee would be in force automatically then.

anyway, you should sought for clarification to the confirming bank.

[berry]

please tell me one thing, which transaction is to occur first. the guarantor will only confirm after it has received the advance payment. and the confirming bank will only pay when it receives the confirmation. i think there is a conflict in this clause.