Best Trade Solution

Dear all,
is the confirming bank always nominated bank.
regards
nesar

Not Necessary.
Bannk A issued a confirm Credit where:
Advising Bank:X
confirming Bank:x
Reimbursement Bank:X
Drawee Bank: X
and
Available with any Bank

Waiting for Nesar's crtics...................

Not so simple. This is a issue which has changed its answer from time to time. Just after the publication of UCP, confirming bank was regarded as a nominated based on the wording of article 8a. Later after the publication of commentary on UCP, we found that the confirming bank may not be a nominated bank!! I think this is a data conflict as per article 14D however if I quote the exact line from the commentary, it says “subject to the structure of the documentary credit, a confirming bank may not be a nominated bank.”
Now what are the possible structures?


iLC

GOOD ANSWER ILC.


thanks

Dear Nesarul,

UCP 600 Article 2 defines the term “nominated bank” as follows: “Nominated bank means the bank with which the credit is available or any bank in the case of a credit available with any bank.”

It is understood from the above definition that if a confirmed credit is available with a bank other than the confirming bank, the confirming bank will not be regarded as a nominated bank.

Yet, UCP 600 Article 8 (Confirming bank undertaking) refers to the phrase “another nominated bank” that makes us think the confirming bank is also a nominated bank whether the credit is available with itself or with another bank.

Based on Article 8 which refers to the confirming bank’s obligation to honour or negotiate if the credit is available with itself or with another nominated bank and that nominated bank fails to honour or negotiate, I tend to support the view that a confirming bank is always a nominated bank. Yet, a silent confirming bank, i.e., adding confirmation to the credit without the issuing bank’s authorization, will not be deemed to be a nominated bank unless the credit is available with any bank.

Best regards,
Nguyen Huu Duc