assignment

[hassan]

Dear all,
Please help me!
in our bank there are some dispute on understanding of the assignment refered to in UCP 600 Art.39. please tell me your understanding of said Article. specialy let,s know wether said assignment relates to before presentation or after presentation and honouring by issuing bank?
thanks

[ahsioz]

Hi there,
Assigment in the art 39 refers to the funds not the lc itself. Therefore the assignment should take place after presentation and the honoring of documents.

[S.Khalili]

The beneficiary of a credit can instruct the bank in his country, in case of compliant presentation, to effect payment to someone else, most likely his supplier on receipt of proceeds.

Assignment procedure need arises when beneficiary has no funds to buy raw material for manufacturing of goods to be exported and he purchases raw material on credit from local supplier.

Open to further comments.




Disclaimer:
The reply given is not to be construed as being other than solely for the benefit of guidance, proliferation and exchange of knowledge. There should be no legal imputation associated with the reply offered.S.Khalili

[hassan]

As everybody see we have two different comments from two persons. the problem is this. it is not clear enogh that assignment mentioned in Art. 39 of UCP 600 speaks about before presentation or after presentation.i hope other freinds participate and give their comments to get a clear and correc meaning of assignment above.

[Ljo]

Dear Hassan

From my knowledge, the request for assignment will be given when the beneficiary presents documents to the nominated bank. While making presentation, he will indicate his intention to assign proceeds.
However, even after presentation he may request the nominated bank to pay another party if he so desires. UCP does not speak of when an assignment request must be made and I feel it is solely based on the beneficiary's relationship with his bank.

[berry]

an assignment of proceed has nothing to do with before and after presentation. it can be done anytime before the receiving the proceed. in common cases, an assignment will occur before the presentation; in fact just after receiving the LC, as its likely that only after such assurance, supplier to the beneficiary will provide goods to the beneficiary on credit.

however assignment of proceeds is only effective when there is a complying presentation.