Article 38(k) Of UCP600 Has Great Value And Made Life Simple
Posted: Fri Aug 22, 2008 10:56 am
hello friends
At last I am able to manage some time to read some of the letter of credit news letter. I will share some of the comments from Doris Andersen of Spar Nord Bank, that she made at a seminar in India.
At one point, she said “We find the article on transfers of great value, especially 38 k, which has made life easier for us."
When I read this, I understood the significance of the HSBC slogan “Everyone has a different view!” For a number of times, I have seen bankers from Europe are in great support of 38k. But in my country some letter of credit practitioner are so much against that ICC has to give an opinion allowing direct presentation to issuing bank in case of 100% transfer. However I never understood what could possibly go so wrong if the shipping documents are routed through the transferring bank.
She further continues
“We find it annoying, however, that so many banks, mostly within Asia, are writing out certain articles without replacing them by other articles or conditions.”
To me such exclusion means that some people are not happy with the UCP600 or they have failed to understand the new rules. Thus making it a Mr. Beans Law; follow the rules as long as they fit you.
Personally I think, modification is better than exclusion. Unless it’s the transshipment issue, a special condition in most cases should be sufficient enough to supersede the UCP articles.
I will end with a quote from her
“Everyone has their own views of what should or should not have been included within the rules. These have been well documented in a number of articles. At the end of the day, the text has to reflect the overall views of the majority at the same time striking a balance between the obligations, rights and needs of an issuing bank, confirming bank, nominated bank and a beneficiary.”
shahriar
At last I am able to manage some time to read some of the letter of credit news letter. I will share some of the comments from Doris Andersen of Spar Nord Bank, that she made at a seminar in India.
At one point, she said “We find the article on transfers of great value, especially 38 k, which has made life easier for us."
When I read this, I understood the significance of the HSBC slogan “Everyone has a different view!” For a number of times, I have seen bankers from Europe are in great support of 38k. But in my country some letter of credit practitioner are so much against that ICC has to give an opinion allowing direct presentation to issuing bank in case of 100% transfer. However I never understood what could possibly go so wrong if the shipping documents are routed through the transferring bank.
She further continues
“We find it annoying, however, that so many banks, mostly within Asia, are writing out certain articles without replacing them by other articles or conditions.”
To me such exclusion means that some people are not happy with the UCP600 or they have failed to understand the new rules. Thus making it a Mr. Beans Law; follow the rules as long as they fit you.
Personally I think, modification is better than exclusion. Unless it’s the transshipment issue, a special condition in most cases should be sufficient enough to supersede the UCP articles.
I will end with a quote from her
“Everyone has their own views of what should or should not have been included within the rules. These have been well documented in a number of articles. At the end of the day, the text has to reflect the overall views of the majority at the same time striking a balance between the obligations, rights and needs of an issuing bank, confirming bank, nominated bank and a beneficiary.”
shahriar