Withdrawal of confirmation
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sean
- Posts: 27
- Joined: Sun May 02, 2010 12:57 am
- First Name: sean
- Last Name: karrim
- Organization: standard bank
- Filter: Two Plus Two =: 4
Withdrawal of confirmation
We received message from advising bank requesting their confirmation charges which are for the applicant's account. However it seems like he does not want to pay them. Not that he has a choice. We also viewed email correspondence where benef advises applicant to have us as issuing bank change to without confirmation. If benef is in agreement to have confirmation withdrawn can the confirming bank decide to unconfirm the credit after it initially confirmed the credit? Thanks in advance. to me confirming bank cannot take away its confirmation even if benef is willing to have it unconfirmed.
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picant
- Posts: 2026
- Joined: Wed Aug 20, 2008 1:49 pm
Confirmation
Hi Pal,
L/C has already advised and confirmed, or confirmation is outstanding due to payment of charges?
If has been already advised with confirmation, to modify "confirm" to "Without" an amendment is necessary.
See art 37 c, UCP 600 for liabilities.
When there is a dispute in contract terms concerning payment of charges, the applicant has to ask its bank to issue l/c with the clause "MAY ADD",
so beneficiary will decide what to do.
Other comments appreciated
Ciao
L/C has already advised and confirmed, or confirmation is outstanding due to payment of charges?
If has been already advised with confirmation, to modify "confirm" to "Without" an amendment is necessary.
See art 37 c, UCP 600 for liabilities.
When there is a dispute in contract terms concerning payment of charges, the applicant has to ask its bank to issue l/c with the clause "MAY ADD",
so beneficiary will decide what to do.
Other comments appreciated
Ciao
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sean
- Posts: 27
- Joined: Sun May 02, 2010 12:57 am
- First Name: sean
- Last Name: karrim
- Organization: standard bank
- Filter: Two Plus Two =: 4
confirmation
Dear Picant,
LC has been advised and confirmed. If we send an amendment to change from "confirm" to "without" we are still liable to pay the charges. The confirming bank still wants those charges from us as issuing bank because they assessed our bank and country risk. They will obviously not waive the charge because we want to amend to "without" confirmation. Thanks
LC has been advised and confirmed. If we send an amendment to change from "confirm" to "without" we are still liable to pay the charges. The confirming bank still wants those charges from us as issuing bank because they assessed our bank and country risk. They will obviously not waive the charge because we want to amend to "without" confirmation. Thanks
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picant
- Posts: 2026
- Joined: Wed Aug 20, 2008 1:49 pm
Confirmation
Hi Pals,
L/c is a way to get commissions, for the banks, but these commissions must represent a work or a risk to pay. If a bank confirmed an l/c is entering in a risk: to pay and not be reimbursed.,but if its engagement ceases: no risk no commission. So I think that the advising/confirming bank can charge the issuing bank, by calculating a daily risk rate for the period in which confirmation was in force and avoid to claim said charges for the other period of time, to the expiry date. Applicant is liable for any charges, but it can ask the beneficiary to reimburse if that has been agreed in the contract.
A last thing: all is outside UCP 600
Other comments appreciated
Ciao
L/c is a way to get commissions, for the banks, but these commissions must represent a work or a risk to pay. If a bank confirmed an l/c is entering in a risk: to pay and not be reimbursed.,but if its engagement ceases: no risk no commission. So I think that the advising/confirming bank can charge the issuing bank, by calculating a daily risk rate for the period in which confirmation was in force and avoid to claim said charges for the other period of time, to the expiry date. Applicant is liable for any charges, but it can ask the beneficiary to reimburse if that has been agreed in the contract.
A last thing: all is outside UCP 600
Other comments appreciated
Ciao