Negotiating bank

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Question
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Joined: Wed Nov 03, 2010 2:03 pm
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Negotiating bank

Post by Question » Wed Nov 03, 2010 2:07 pm

Hi, I want to know how a negotiating bank can check submitted documents if it is not the advising bank? If the advising bank is Bank A and the negotiating bank is Bank B, how does Bank B check the documents if it does not have the copy of the LC?

Also, can the negotiating bank be restricted? for example, can i say that i want my lc to be only negotiated through Bank B in country X (while beneficiary is in Country Y and advising bank is Bank A).
Are there any legal/operational hurdles that this kind of transaction might face?

Thank you

kadir
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Negotiation Bank

Post by kadir » Wed Nov 03, 2010 3:41 pm

A negotiation bank can also be an advising bank, Negotiation Bank is the bank, stated in fld 41A of the lc ( available with ) and advising bank ( receiver of the FIN 700 swift msg ) must route the lc to the bank in fld 41A of the lc ( negotiation bank) by FIN 710 swift msg than negotiaton bank has the lc, and advises the credit directly to beneficiary or thgh a second advising bank ( in fld 57A of the credit ). after utlizitaion, documents can be directly presented to negotiation bank or second advising bank, if presented to second advising bank than 2nd advising bank should dispatch the documents to negotiation bank where the credit is available.
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For your second qstn, negotiation bank can be restricted, credit can be issued to a negotiation bank in country X, and can be advised by negotiation bank to the beneficiary through the advising bank in country Y.
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Regards
Kadir

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